Palantír

Warning: Wikipedia contains spoilers.

A palantír (sometimes translated as Seeing Stone) is a stone that functions somewhat like a crystal ball. When one looks in it, he can communicate with other Stones and anyone who might be looking into them; people of great power can manipulate the Stones to see virtually any part of the world. They were made by the Elves of Valinor in the Uttermost West, almost certainly by the Noldor and possibly by Fëanor. Many palantíri were made, but the number is not known. Some are known to be larger than others, and to have power over other Stones. The master stone was kept in the tower of Avallonë on Tol Eressëa. They are known to have a power over people, as seen from the experience of Peregrin Took and the Orthanc-stone.

Some of the stones were given to the Dúnedain of Númenor as a gift, during the Second Age. Of these, Elendil took seven with him on his flight to the continent of Middle-earth, and in time they were distributed among seven places: four in Gondor and three in Arnor. By the end of the Third Age, four had been lost forever, one was hidden in the Dark Tower of Barad-dûr, and one had been rendered virtually unusable.

• The Stone of Osgiliath was the largest stone among the seven, and chief among them. It was placed in a prominent building in the capital city of the kingdom of Gondor. The ceiling was painted to resemble a starry sky, and gave its name (os-giliath, the Dome of the Stars) to the city itself. This Stone was the first to be lost: during the civil war of the Kin-strife[?] around the middle of the Third Age, it fell into the river Anduin.
• One Stone was placed in the tower of Elostirion[?] in the Tower Hills[?], just west of the Shire. Until it was removed from there, it could be used to look along the Straight Road to Avallonë. The other two Stones in Arnor were those of the watch-tower of Amon Sûl[?] and the city of Annúminas. Arvedui[?] Last-king had all three of these with him when he was shipwrecked in the Ice-bay of Forochel, approximately two thousand years into the Third Age.
• One Stone was placed at Minas Ithil in the mountains that came to be known as the Ephel Dúath. When Minas Ithil fell to the Nazgûl, the Ithil-stone was taken to the Barad-Dûr and used by Sauron.
• One Stone was placed at Orthanc, the great tower built by the Dúnedain in the Second Age at the southern end of the Misty Mountains. It fell into the hands of the corrupt wizard Saruman, who used it to confer with Sauron and the Ithil-stone.. This communication likely influenced his decision that resistance in the War of the Ring was futile. The Orthanc-stone was in the hands of Gandalf at the conclusion of the War.
• One Stone was placed at Minas Anor, later renamed Minas Tirith and made the capital of Gondor. It was ultimately used by Steward Denethor to communicate with Sauron. Denethor did not become corrupted, but the great effort of will that the communication required of him led him to quick aging. Furthermore, Sauron largely controlled what Denethor saw, leading to the latter's despair and insanity. Denethor was holding the stone when he committed suicide on a funeral pyre[?], and after this, only people of exceeding power could see in it anything other than two flaming hands.