The Sands of Time are a force, capable of controlling time itself. There are four objects related to them: The Hourglass, which contains the Sands, the Dagger of Time, which unleashes them from the Hourglass, The Medallion of Time and the Staff of Time. The Sands of Time and these objects were created by Kaileena, the Empress of Time.
The Sands are able to corrupt everybody in their path Sand Guards , with a Sand Portal nearby. Note that they are breathing SandAdded by Manas101ath when released, except for those who possess the Dagger, the Medallion or the Staff. Organisms that are corrupted will turn into sand versions of itself.
In The Sands of Time, the Prince is tricked into releasing the Sands of Time, turning the entire court of Azad into Sand Monsters, except for himself (with the Dagger), princess Farah (with the Medallion) and the Vizier (with the Staff). Helped by Farah he succeeded in making a Grand Rewind and setting things right. On a side note, there is a room with some paintings on the wall that tells the story behind the Sands.