Originally posted 2016 - updated 2021:
The Fire Steel (aka Ferro rod, see left photo) is not to be confused with the traditional Flint and Steel (see right) where the steel would be struck against flint to create a spark. The Ferro rod is made from Ferrocerium which is a man-made metallic alloy invented in the 20th Century using rare earth alloys. When struck against steel shards of the alloy are scraped off which oxidise at a low temperature, which ignite and get VERY hot (3000 Celsius). The traditional Flint and Steel was the prevailing method of lighting fires from the Iron Age until the mid to late 19th Century and even in the early 20th Century; before matches and then lighters became prevalent. Before the advent of steel, a variety of iron pyrite or marcasite was used with flint and other stones to produce a spark.
I don't like the Ferro rod at all and I now don't encourage the use of Ferro Rods especially in these times of environmental crisis as it is a modern man-made alloy using rare earth metals which have to be mined and the hot sparks are actually very very hot (3000 degree metal shards.) The Ferro rod is an all too common bushcraft tool which is also used as an easy way to teach fire lighting by many bushcraft and outdoor educationalists. Kid's do like Ferro rods due to the sparks - but they are very hot shards of metal! It has it's use for survival situations but I don't agree in their use for an everyday fire lighting tool.
Ferrocerium is used in many applications such as cigarette lighters - but they only use a small amount unlike ferro rods.
Please do use common sense if introducing children to fire lighting with ferro rods. The sparks produced from a Ferro Rod are very HOT metal shards and can burn skin and catch things alight (e.g. tents) so children should be supervised when using them.