Palo Santo means "Holy Wood". This sacred wood, native to South America, has been used as an incense and for ceremonial and medicinal purposes for thousands of years by the Incas and the Mayans, it is related to Frankincense, Myrrh and Copal.
Burning of Palo Santo, is like the equivalent of "Reverse Smudging". To smudge, using dried herbs like white sage or sweetgrass, you're clearing out negative energy. But when burning Palo Santo you're bringing in good vibes and spirits. Smudging can also be used to cleanse the air before, during and after most types of sickness including colds, the flu, illnesses of all kinds.