“What I'm trying to tell you, to show you, to convince you, Rainbow Dash, is that the Elements of Harmony, the physical trinkets that represent the power of my forebearers, are no longer important for the absolute protection of this realm. You, however, are important. You are special and you are precious and you are one of a kind.”
- Austraeoh, "Prism"

The Elements of Harmony describe the six aspects of Harmony: Kindness, Generosity, Laughter, Loyalty, Honesty, and Magic. They are manifested physically as six jeweled necklaces, and these are typically what is referred to when the elements are mentioned. However, the true elements are incorporeal forces which are bound directly to the souls of ponies which manifest their attributes.

The Elements are the result of the the Alicorns channeling energy through the Harmonic Prism, and the pendants were a result of these elements binding themselves to mortals. Princess Celestia explains that " the beginning of all things, when my sister and I brought life and purpose to this world, I knew that the Elements could eventually be broken down and disseminated among mortals for the sake of protecting the tranquility of this plane"[1]. Shortly before Nightmare Moon's return, Celestia saw fit to finally give the power of the Elements to the ponies of Equestria; thus Rainbow, Twilight, and her friends became their first mortal bearers. This binding was more than superficial - as Luna explains, "...The power of the Elements had transferred out of the stones and into their essences.  It was something even my sister didn't predict.”[2]

All the pendants except that of Loyalty were destroyed along with their bearers when they backfired in the fight against Discord. This, however, did not destroy the Elements themselves, nor did it greatly upset the balance of nature. It has been hypothesized that the Elements act with an independent will, like that of the Force (Star Wars) or the Lifestream (FFVII).

Harmonic Acclimation and Unification Edit

in Eljunbyro, before Rainbow Dash leaves Ponyville, Luna introduces the concepts of Harmonic Acclimation and Harmonic Unification. Because the Elements are eternal, their "destruction" in Ponyville simply meant that they transferred themselves to another vessel, which happened to be Rainbow Dash and her Element of Loyalty. This explains how Rainbow was able to turn Discord into stone all on her own, which Discord remarked was "impossible". Since the original bearers were bound to the elements as well, they became just as immortal and continue to live on inside a vaguely-defined hammerspace inside Rainbow's pendant. This is where Twilight Sparkle stayed until her reification at the end of Yaerfaerda.
  1. Eljunbyro ch. 61
  2. Ynanhluutr ch. 18