The Green Crystal is an item that can be retrieved at the Rock Maze in Tanglevine Jungle. You get it by clicking on the giant dog statue (its location changes every day).
You can also find the green crystal next to the Winter Wizard in the Icy Aerie (use the special key in Presto's Edge to get there).
You can use it to change your Crystal critter to a chromatic critter (a critter with more color variety). You can either go to Kan the Geomancer to change most of the critters, or one of the Garden Sprites in The Garden Gazebo to change the Kitty to chromatic.
The Green Crystal was used as an exchange item (along with 1000 coins) to earn a Snowman Costume from the Winter Wizard during the Winter Festival.