Dewdrop is the name of a straw doll owned by Lily before the Pagan villagers were slaughtered by the Mechanists in the T2 mission Trail of Blood. With Garrett's arrival, Lily's ghost appears and gives Dewdrop to him, saying "His name's 'Dewdrop', and he doesn't likes Mechanists".
The doll is supposed to be magical, but a bug in the game renders it useless in the unpatched version. With this corrected, Dewdrop is able to float in the air and temporarily blind the Mechanists in the Pagan Village, much like a Flash Bomb. This does not always work, as the blinding effect is dependent upon where the doll appears.