A type of clay that was originally found next to the French village, Montmorillon. Nowadays, Montmorillonite is used almost like a synonym for the most common type of clay, bentonite. Technically bentonite is montmorillonite and additional crystalline structures, or to put it another way, montmorillonite is 100% clean bentonite.
As for montmorillonite in skincare products, it's used for its magic absorbent properties. It's excellent at instantly sucking up sebum and gunk from the skin and it might even be helpful in treating some rashes or skin irritations (contact dermatitis). But be careful, it can also be drying.