Palo Santo is not a new discovery. In South America, indigenous tribes have had the benefit of this powerful ritual component for hundreds of years. Long before the modern era, shamans used it to perform similar rituals that continue to be used today. For example:
The people of the region used sticks made from this wood to protect against what they would describe as "mala energia", or "bad energy". This would empower them to cleanse an area and ensure those who used the space would be more likely to experience better fortune.
In other contexts, Incas would use oil refined from Palo Santo to purify the spirits of those who they felt needed it most. 
Modern inhabitants of both Peru and Ecuador continue to use it for similar practices to this day. Shamans, or medicine men, will reportedly use Palo Santo sticks in contexts that reflect those of their ancestors. They believe the smoke from the flame of a Palo Santo stick will remove negative energies or spirits from ritual attendees.
In a more worldly way, this ritual component also has another benefit. Its strong and sweet aroma is perfect to ward off insects in these countries. Those who burn it say that it purifies the air, even in a non-spiritual sense, protecting the locals from the presence of mosquitos and other insects.
Palo Santo's Place in Indigenous Medicine
This holy wood is believed to be a source of natural healing in many parts of South America. In its history, locals have used it as a part of a treatment to respond to many different ailments including:
Arthritis
Headaches
Throat pain
Bronchitis
Cold
Flu
In some contexts, it has also offered benefits to those with mental health difficulties, such as anxiety and depression. While not a proven cure, it is believed it can work alongside even a modern healing plan to provide additional benefits.
Some even believe that the wood boasts a connection between the physical and spiritual worlds. Through it, people can find a new way to think about their lives and find a new source of strength in the aroma and effects of its smoke.