Warpstone (also called wyrdstone or known by Nagash as abn-i-khat (burning rock)) is a substance in the Warhammer Fantasy Battle universe best described as crystallized Chaos. When the polar warp gates of the Warhammer World collapsed, warpstone was scattered around the world as dust and as larger chunks, and large pieces occasionally fall to the ground as meteorites. It is not known if these are naturally-occurring chunks that drifted through space and were captured by the Warhammer World or if they were launched into orbit at the collapse and subsequently returned.
It is potent, nasty, dangerous stuff, as it is literally solidified magic. It can be used to fuel magic rituals and machines, but it is volatile and mutates anything exposed to it -- whole towns and regions have been permanently altered and rendered uninhabitable by the accumulation of warpstone. The "hero" factions won't touch the stuff, and place very stiff penalties on people who possess and traffic it, and of course the forces of Chaos can't get enough of it and are willing to pay good money (or spend a lot of lives) to get it. The Skaven are particularly fond of warpstone -- they eat it, use it as currency, and use it in rituals. Clan Skryre also uses lots of it in their inventions, either as a power source or as ammunition.
After Nagash's first defeat and exile to the wasteland, he encountered and killed 3 skaven hunters. He found the warpstone in one of their pocket and ate the tiniest piece of it. By that time, Nagash has been mutilated so much by his "youth elixir", he was no longer a human and was able to withstand and harness the warpstone's power. The stone's power is also so chaotic that it made him lose his magic control, senses and mentality.
The town of Mordheim got whacked by a big warpstone meteorite, which sent the civilians all running and drew in adventurers like moths to a flame. The forces of Chaos all wanted the warpstone for themselves, the forces of Order wanted to keep the warpstone out of enemy hands, and the possibility of loot drew in most everyone else.
One of the two moons in the Warhammer World is made out of nothing but the stuff. People often forget there are two moons, including Black Library authors from time to time. Any astrological event involving the Chaos Moon Morrslieb usually heralds bad things (like plot development).
A category of substances in Age of Sigmar, Realmstone is essentially Warpstone but solidified from one of the Winds of Magic instead of Chaos energy. Indeed, Warpstone is referred to as the Realmstone of the Realm of Chaos. Though not as outright evil as Warpstone, Realmstone still has a shady reputation, also being known as "Cursestone" due to it being said to bring disaster upon those who rely on it.
Unsurprisingly, the Skaven still covet this substance as it has proved to be an even more effective source of power for their many doomsday devices.