It is a magically connected place with ancient runes containing the secrets on how to enter a different world known as The Spirit Realm.
It's protectors and the people who lived there - "The Children of Naia" - are now long gone but it still holds a connection to those who are magically inclined - "The Manifested".
Sheila and Rikky are connected to the place spiritually and discovered a rift between worlds on Season 2 Episode 12. Later Sheila and her fellow spirit walkers entered a portal leading into the spirit realm.
On Season 2 Episode 20 the location was invaded by a small army of mercenaries lead by Thaddeus. Setting a trap to catch the spirit walkers he defiled the place, ransacking and destroying the artifacts there. He also consumed the great water elemental spirit that used to reside there. However, he was unable to go further into the ruins beyond the water shrine, as he did not possess the ability to unseal the gateway himself.