The Sands are, as the name implies, sand, a strange, magical sand, that seems to spread and infect both animate and inanimate objects, turning them to sand.
During The Sand War, it spread all over Minecraftia, causing people and animals to die of hunger, thirst and, no doubt, sunburns. The people of Minecraftia somehow fought back the Sands, led by Verigan, and they encased it by building The Wall, which contained it in The Desert. However, a "terrible evil" rose up from The Desert, forcing them once again to fight back. Verigan Antioch and Karpath Antioch vanquished the evil, and sealed it in the desert. Sadly, Verigan died in the final battle.
Karpath built Verigan's Hold, established the Templars and the Crimson Cross, all to help contain the Sands. He also had a map, written by Verigan, of the path they took into the Desert. But it was split, and the pieces scattered. Now, Israphel and his cult seek to conquer Minecraftia, building Hellgates to spread the Sands, and attack the Wall. But the Cult is being fought by Honeydew, Xephos, and Verigan's grandson, Knight Peculier. They have searched for the pieces of Karpath's Map, along the way destroying Gates, and gathering allies. They restored the map, following a path to other maps, eventually entering the Desert. They discover a huge metal hand, and notes left by the late Templar Enoch, from long, long ago.
It seems the Sands were not meant to destroy the world, but to imprison the Jade Sentinels, some form of giant automatons. They did this by converting the metals in the Sentinels to sand. The Sands have lost much of their power, and have been manipulated to serve an ancient master, presumably Israphel, so as to let the Sentinels rise. The sands also seem to convert living things into sand or sandstone from prolonged contact. Templar Enoch's hands turned to sandstone from excavating the Sands, and they seemed to drive him insane, but that could be caused by the Taint of Israphel.
It is unclear wether the sands are an evil being or not. They seem to always appear if a nether portal is left on, suggesting a connection with the Nether. On several occasions Israphel attempts to free it, breaking the walls that hold it in. However, he also works very hard to free the sentinels, which themselves are trapped and incapacitated by the sands. Enoch, Peculier and Professor Webley all provide extensive but somewhat confusing explanations of the sand holding back the Robots. It is possible that the sand is just a containment device for the sentinels and "sand god", a nuisance for Israphel that he thought would make a useful weapon.
The Sands has appeared in small amounts outside The Desert: