A relic is an object kept in tribute to a holy person. Some relics are body parts such as bone chips or teeth. Others are items once belonging to the person, most often snips of clothing. Catholics aren’t alone in collecting relics. Other religions like Buddhism employ them. People of faith backgrounds that permit it keep cremains of loved ones in an urn on the mantle (See here for Vatican instruction on Catholic burial, cremation). I have a shirt that belonged to my dad, which I still wear. Relics are a traditional way of keeping in touch with someone special.
Catholic relics are as old as the church. Martyrdom was a frequent if not typical cause of Christian death. The faithful collected the martyrs’ remains, often in pieces, for secret burial in places like catacombs. When available, the instrument of death was spirited off as well. Think: relics from the True Cross. Christians gathered at martyrs’ tombs to celebrate Eucharist. When the persecutions finally ceased, churches were erected on the gravesites. Christians considered burial near a martyr a privilege. A tug-of-war over these bodies became typical; some were exhumed and re-interred on the properties of those who could afford it. In the Middle Ages, Crusaders pilfered lots of relics and carried them to Europe.
Relics were catechetically useful. They spurred interest in the saint whose virtues might be imitated. In 410, a council in Carthage ruled that saints’ shrines had to contain authentic relics or be destroyed. In 767, a Nicaean council determined that every altar must contain a relic or Mass could not be celebrated on it. This decree echoes the original practice of celebrating Mass on the graves of martyrs and is upheld in current canon law (no.1237). Exceptions are made today for portable altars such as those used in wartime.
Selling relics has always been forbidden. Church law says significant relics can’t even be moved around without express permission from the Vatican (no. 1190).
Attributing magical powers to such items is considered an abuse, but the tendency to be superstitious about holy objects is not unknown in the modern church. From the Holy Grail to the Shroud of Turin, the curious and the credulous will always find a less than edifying fascination with such objects. Church teaching draws a distinction between proper and improper veneration. Worship belongs to God alone. Even if a saint should appear suddenly in an apparition, human honor is the limit of our tribute.
Scripture: The Bible regards holiness as a divine attribute communicable to people, places, and things (e.g. Moses’ shining face, the Ark and its sacred utensils, the Temple’s Holy of Holies.) The topic of relics, specifically, is not treated. But see 2 Kings 13:20-21; Mark 5:25-34; Acts 5:12-15
Books: Saints Preserved: An Encyclopedia of Relics – Thomas Craughwell (New York: Image Books, 2011)
Holy Bones, Holy Dust: How Relics Shaped the History of Medieval Europe – Charles Freeman (New Haven: Yale University Press, 2012)