The Forces of Light and Dark in SotC
There are two different seals used on Dormin that we see in SotC. The first is the one which Wander removes, the Colossi and the Idols in the Shrine of Worship. The second is the one Emon uses to try to undo the damage, the pool of light in the Shrine. I have already covered the first of these to some degree in my discussion of the Colossi, as they make up a large component of this Seal. In the document I got as far as determining that there is both a physical and more abstract magical elements to how the Light Magic in the Colossi seals Dormin. The physical aspect is that the Light Magic appears to permeate the Colossi and turn their bodies into a barrier the Dark Magic cannot physically pass through. This aspect is damaged by the Ancient Sword when Wander uses it to remove the Sigils, creating points through which the Dark Magic can leave the Colossus, the points at which the tendrils that enter Wander are observed leaving the Colossi. The magical aspect is what keeps the Dark Magic in place inside the Colossus even if one or more of the Sigils has been removed, as long as there is at least one left. This part is only broken when all the Sigils are removed, and until that point the Dark Magic cannot escape even through the points at the ready removed Sigils. When this part is fully removed the Colossus immediately dies.
A point which I ignored in that original discussion is the question of how the Idols in the Shrine of Worship fit in. Dormin says at the very beginning that the actual objective is to destroy the Idols, but that defeating the Colossi is the only means to that end. That defeating the Colossi is not the objective itself suggests that it is actually the Idols which are responsible for sealing Dormin, despite the fact that the Dark Magic physically resides in the Colossi. While defeating the Colossi does destroy the Idols, it is never made explicitly clear how or why.
The magical side of the Seal is more difficult to examine than the physical because it is more abstract. We can't see it, we can only infer its presence from other things we see. Taking the Colossi in isolation we could imagine that the Sigils alone are responsible for the magical aspect; since these are all we observe on the Colossi themselves it would appear to be a reasonable idea. Fortunately we are specifically told of the importance of the Idols, that not only are they part of the Seal that Dormin wants removed, but that their destruction is the true objective of Wander's mission. Since we know that they are so significant, and we have narrowed down their effect to the magical aspect of the Seal, it makes sense to assume that they play a significant role in the magical workings of the Seal.
Assuming the Idols are responsible for the magical aspect of the Seal, the question we are left with is the role of the Sigils. Consider what they are: markings. The Idols may be source of the magic which seals Dormin, but the Colossi are the vessels which carry the Dark Magic. There must be some way that the power of each Idol is associated with each Colossus. This may be the role of the Sigils, that they bind the power of the Idols to the Colossus they mark. When Wander fights a Colossus the Dark Magic is unable to escape until all the Sigils are removed, despite the fact that he appears to be opening holes in the physical barrier which contains it. Critically, his attacks have no real effect until every Sigil is completely removed. Whatever the Sigils do, they do it just as well with only one badly damaged one as they do with two or three intact ones. This is how we derive the presence of a magical aspect they do not provide. However, a single badly damaged Sigil will serve as a mark to link the Colossus to an Idol just as well as three perfect ones will. Since it is the Idols that are providing the actual power to seal Dormin, removing the Sigils has no effect until they are all completely gone, as the link between the Idol and the Colossus is still intact otherwise. The instant the last one is removed however, the mark is gone, the link is broken, and the Seal is lifted. The Colossus goes from uninjured (visibly at least) to dead in one final blow, and the Dark Magic goes from completely contained, to instantly free. Wander does not destroy the source of the Seal, but he does something similar; he cuts it off from what it is supposed to be sealing.
As for the Idol in question, why is it destroyed by doing this? Look at what exactly happens when it is destroyed: it glows brightly, the very thing which tells us it is related to Light Magic, and explodes. The Idols, being responsible for sealing Dormin, are probably a powerful source of Light Magic. That magical power is normally directed at the appropriate Colossus. With the mark removed, that power no longer has anywhere to go, so the glow we see may be the magic building up inside the Idol, until the point where it destroys itself.
In summary, the Colossi themselves are merely Light Magic imbued vessels for the segments of Dormin. The real Seal is created by the Idols, and bound to the Colossi by the Sigils. The Ancient Sword, itself being a Light Magic artefact, is able to remove these magical markings and break the link, rendering the Colossi nothing more than punctured vessels, and indirectly causing the Idols to explode.
The second Seal is interesting both in that it seems to affect Dormin quite differently from the first and in that despite appearing to be a better Seal, it was not used by the people who originally sealed Dormin, but rather was apparently left as a backup in case the first Seal was broken. Since it is so dissimilar to the first Seal, the first thing to do is examine exactly how it works. The second Seal is activated by dropping the Ancient Sword into the pool at the back of the Shrine, at which point the pool becomes a pool of light and begins pulling Dormin/Wander into it. While Wander's physical form is able to resist by hanging on, the extra 'bulk' added by Dormin is pulled away, reducing Dormin to a shadowy version of Wander. Eventually they disappear completely into the pool, at which point it closes. However, the pool does leave something behind - an infant.
This is referred to as a Seal by Emon, and while it certainly works against Dormin in some way, it may not actually be a seal in the same sense as the first one. Consider that the original Seal split Dormin's physical form up and literally sealed it away in the Colossi. In this case however, Dormin's body seems to be pulled apart, completely destroyed or at least removed from our world. We could have the idea that the pool sends Dormin somewhere, and traps it there. However, the pool, being a bright light, is very likely Light Magic, and given that Light Magic normally contains or harms Dark Magic, and that Dormin's body is pulled apart, it seems more likely that the pool actually destroys its body. Of course, as I discussed in the second on Dormin, there is more to Dormin than this physical form; in fact the 'core' of Dormin is probably the metaphysical aspect which may or may not be affected by this Seal.
Now we must look at what the first Seal achieved by splitting Dormin and sealing it physically. When discussing Dormin I covered how the physical form is a part of the overall being, both in the sense that it is 'only' a part, not the whole being, but also a critical part, such that Dormin cannot simply discard and replace it when it is sealed. Since the metaphysical aspect of Dormin is bound to this physical aspect, sealing it contains Dormin's powers, or at least prevents it from using them in the physical world. Thus the first Seal achieved its goal.
This would explain why the second Seal is a backup only. The original Seal didn't destroy Dormin, it used a vulnerability of its physical body against it to seal it in the physical world. The new Seal merely destroys the physical form, the metaphysical aspect is left unhindered, though unable to manifest. Once it overcomes that, the effects of the second Seal are undone. So, the second Seal is a stopgap. While the first would apparently have lasted indefinitely had no-one tampered with it, this second one will only stop Dormin for a fixed time even if no-one interferes.
Written by Crumplecorn