Glarial's pebble is an item used in the Waterfall Quest and Roving Elves. It is given to the player by Golrie as a reward for freeing him from the dungeon under the Tree Gnome Village. If you lose this pebble all you have to do is go back to Golrie to obtain another.
The pebble is used to gain access to the Glarial's Tomb dungeon near the Baxtorian Falls. Note that, before being allowed to enter the dungeon, the player must bank all weapons, armour and runes.
The word pebble suggests a fairly small stone, but the item on the ground appears to be larger than the player's foot.