It is a large self-sustaining alchemical reaction! The black goo is semi-solid impure Void essence. Anything it touches is destroyed, releasing an uncontrolled burst of essence gases which in turn go on to react unpredictably with their surroundings. It is currently working on chewing through the bedrock under this formerly pleasant valley, and when it contacts the magma under the planet's crust, everyone's problems are going to get a whole lot worse.

Before Kithabel fixed that part, it was massively deranging the planet's weather patterns as a side effect of some complex interactions involving byproduct essence gases. It would go back to doing that if she went away and left it alone for a while, but is currently not up to much except slowly consuming the surrounding landscape.

Destroying the entire mass of black goo would fairly straightforwardly stop it from causing any further problems.