[ Materia is often only as dangerous as the hands that use it. Aerith carries the Ice materia Zack and Cloud gave her, but she'd never use it to harm someone unless she had to. Perhaps it's the same for other people, in other worlds. ]

It's made from Mako, which is a part of the planet's Lifestream, or spirit energy. It flows around the world and when it becomes a crystal it becomes Materia.