ELDER: Now there is a new maharaja, and again the palace has the power of the dark light. […] The evil start in Pankot, then like monsoon it moves darkness all over the country.
Early on, it's difficult to tell if the Village Elder is just superstitious, or if something truly supernatural is happening in Pankot Palace.
WILLIE: I don't understand how one rock could destroy a whole village.
Willie's skeptical about the powers of the rock. Because Indy has seen crazy stuff before, he decides to give the Elder the benefit of the doubt.
INDY: He's saying when the sacred stone was taken, the village wells dried up, and the river turned to sand. The crops were swallowed by the earth, and the animals laid down and turned to dust. Then one night there was a fire in the fields. The men went out to fight the fire. When they came back, the women were crying in the darkness. Children. He says they stole their children.
Okay, this is all a little extreme, except for the children part. Even though the stones do have a mystical power of some sort, there appears to be some superstitious embellishment involved in telling this story.
INDY: I think that somebody believes the good luck rock from this village is one of the lost Sankara stones.
The Sankara stones are likely inspired by Shiva Lingam stones, which some believe can boost a man's virility and fertility.
WILLIE: Magic rocks? My grandpa was a magician. He spent his entire life with a rabbit in his pocket and pigeons up his sleeves. He made a lot of children happy and died a very poor man. Magic rocks. Fortune and glory. Sweet dreams, Dr. Jones.
Willie is used to "magic" being a sideshow act. However, there is no rational explanation for the events she will witness in Pankot Palace. They are all supernatural in nature.
INDY: The legend says when the rocks are brought together, the diamonds inside them will glow.
Because diamonds don't actually glow (at least not until Kay Jewelers makes a scientific breakthrough), this line sets up the stones are something magical. Plus, it foreshadows the incantation Indy will chant at the end, making the stones not just glow but burst into flame like hot potatoes.
SLAVE: Please, let me die. I pray to Shiva, "let me die," but I do not. Now...now the evil of Kali take me. [...] They will make me drink the blood of the Kali. Then I'll fall into the black sleep of the Kali ma
Okay, we have magical stones, guys who can rip hearts from chests—and leave the person still alive, and now we have brainwashing too. What other crazy supernatural stuff could happen in this movie?
[The Maharaja stabs a Voodoo doll of Indy.]
Now we add Voodoo to the mix. Right. Although Voodoo is traditionally Afro-Caribbean, it is sufficiently foreign enough for Lucas and Spielberg to have the Maharaja to utilize it in Temple of Doom. Plus, it ties in to the mind control motif. In the caves, a person can be controlled, or pain can be forced upon them. Scary stuff.