The Orb (or Heart) of Elerion is the sum of all Morghrim’s powers. He put it in there himself, and it’s spiritually connected to him. His thoughts, emotions, perceptions and soul are all tied to it. It basically IS his heart. If destroyed, Morghrim would die. Without it, he’s just a dead man walking—he cannot heal the land or anything. Also, if anyone else bears the orb, they’re virtually impervious to all forms of harm. They will be almost as powerful as the Forest Master, while the Forest Master himself would be weakened.
It is stolen by Draygan by the time of the Avatar's arrival, and has made him practically invulnerable.