Linchpin stones are spiritual anchors said to hold the ground in place and quell the fury of earthquakes—when this one shattered, the surrounding town fell into the broken earth. One account claimed that the moon itself had come tumbling down.
From the Moorth Ruins Site of Grace head South-East through the big stony archway. You'll directly head towards a house ruin. You can go through the house's doorway, exit on the small roof, turn left and around the corner you'll find the talisman lying there on a corpse.