The yad is a pointer used to follow the text while reading from a Torah scroll, and it exists so that the parchment is never touched by the reader hand.
Why the text is not touched
The word means simply hand, and the pointer usually ends in a small hand with an extended finger, which the reader runs beneath the line to keep the place in a text written without vowels or punctuation, where losing the line is easy. The deeper reason for it is reverence and preservation: the scroll is written by hand on parchment and is treated as holy, the oils of the skin would damage it over time, and a tradition holds that the bare hand should not touch the sacred text directly, so the yad keeps a respectful distance between the reader and the scroll.
A small honoured object
The yad is commonly of silver and can be finely worked, and it hangs by a chain from the scroll when not in use, among the ornaments with which the Torah is adorned. It is a modest implement, but it belongs to the same logic that surrounds the whole handling of the scroll, in which the physical text is guarded with a care that expresses what it contains. Reading with the yad is a skill, and the pointer is one of the objects a community keeps as part of the furnishing of the Torah itself.