The words Vibhuti or Bhasma (Sanskrit) or Thiruneeru (Tamil) refer to holy ash. Bhasma means ‘that by which our sins are destroyed and the Lord is remembered’. Thus, when a devotee applies holy ash, it signifies the destruction of the evil tendencies (within) and the remembrance of the divine. Bhasma is also called Vibhuti, which means ‘glory’, because it gives glory to the one who applies it and protects him/ her from ill-health and evil.
Bhasma is the resultant ash from a Homa (sacrificial fire) where wood, ghee and other medicinal herbs are offered as form of worship of the Lord. Ash is what remains when all the wood and offerings are consumed by fire and it does not decay. Similarly, the Lord is the imperishable Truth that remains when the entire creation of innumerable names and forms is dissolved.
Holy ash is specially associated with Lord Shiva, who applies it all over his body. He is often called Vibhuti Bhushan (the one having ash as his ornament). Devotees of Lord Shiva often apply Bhasma as a Tripundra (the form of three parallel lines). When applied with a red spot in the centre, the mark symbolises Shiva-Shakti (the unity of energy and matter that creates the entire seen and unseen universe).
Bhasma is generally applied on the forehead. Some devotees apply it on certain parts of the body like the upper arms, chest etc. Some ascetics rub it all over the body. Many consume a pinch of it each time they receive it. Bhasma is believed to have medicinal value and is used in many Ayurvedic medicines. It absorbs excess moisture from the body and prevents colds and headaches.
Sages and saints have expounded the greatness of Bhasma in their compositions too – Adi Shankara praised its greatness in Sri Subramnaya Bhujanga Stotra (shloka 25) and Thirugnana Sambandar did many wonders with Bhasma and he explains its greatness in one of his Pathigams called Thiruneeru Pathigam.