Cordyceps sinensis (यार्शागुम्बा) yarshagumba.
It is known as यार्शागुम्बा, yarshagumba, yarchagumba in Nepali; Yartsa Guenboob in Bhutani; keera jhar or keeda ghas in India; dong chong xia cao in Chinese means "winter worm, summer grass"; "vegetable caterpillar" or “Caterpillar fungus” in English term. 
Cordyceps is a genus of ascomycete (sac fungi) that includes about 400 described species. All Cordyceps species are endoparasitoids, mainly on insects and other arthropods; a few are parasitic on other fungi. The best known species of the genus is Cordyceps sinensis first recorded as yartsa gunbu in Tibet in the 15th Century. It is known as yartsa gumba in Nepal. When a Cordyceps fungus attacks a host, the mycelium invades and eventually replaces the host tissue, while the elongated fruiting body (stroma) may be cylindrical, branched, or of complex shape. The stroma bears many small, flask-shaped perithecia that contain the asci. These in turn contain the thread-like ascospores, which usually break into fragments and are presumably infective. The genus has a worldwide distribution and most of the approximately 400 species have been described from Asia.
The Cordyceps is a rare species of fungus (mushroom) widely used both in clinical medicine and as a household remedy. It is also considered potent at strengthening lung and kidneys, increasing energy and vitality, stopping hemorrhage, decreasing phlegm, and as an overall tonic. The Cordyceps sinensis, a combination of insect and plant remains inactive in winter and comes out in summer. Of the two types, the black one is more expensive than the white. In Nepal Cordyceps (Cordyceps sinensis) locally called as "Yarchagumba". Both names are derived from the Tibetan Yartsa gunbu, which means summer grass winter-worm. Cordyceps is found in subalpine pasture lands of Nepal including Jumla and Dolpa area belonging to Karnali zone. Yarchagumba is found on the high hills of Dolpo and this is collected during the spring and early summer when the snow melt and lichens sprout out on the hills.
Caterpillar fungi are the result of a parasitic relationship between the fungus and the larva of the ghost moth genus Thitarodes. The fungus germinates in living organisms (in some cases the larvae), kills and mummifies the insect, and then the cordyceps grows from the body of the insect.
The caterpillars prone to infection by the fungus live underground in alpine grass and shrub lands on the Himalayas at an altitude between 3,000 and 5,000 m (9,800 and 16,000 ft). Spending up to five years underground before pupating, the caterpillar is attacked while feeding on roots. The fungus invades the body of the Thitarodes caterpillars, filling its entire body cavity with mycelium and eventually killing and mummifying it. The caterpillars die near the tops of their burrows. The dark brown to black fruiting body (or mushroom) emerges from the ground in spring or early summer, always growing out of the forehead of the caterpillar. The long, usually columnar fruiting body reaches 5–15 cm above the surface and releases spores.
In Nepal caterpillar fungus is found on the subalpine pastures in Dolpo in Karnali Zone and Darchula in Mahakali zone. It is also common in Bhutan and India's Himachal Pradesh and Uttarakhand Himalayas. Reports of distribution outside of "High Asia" are erroneous and relate to other species of Cordyceps, e.g. Cordyceps militaris.
The fungus is a medicinal mushroom which is highly prized by practitioners of Tibetan medicine, Chinese medicine and traditional Folk medicines, in which it is used as an aphrodisiac and as a treatment for a variety of ailments from fatigue to cancer. It is regarded as having an excellent balance of yin and yang as it is apparently both animal and vegetable (though it is in actuality not vegetable, but fungi). Assays have found that Cordyceps species produce many pharmacologically active substances. They are now cultivated on an industrial scale for their medicinal value. However, no one succeeded so far growing the larva cum mushroom artificially. All artificial products are derived from mycellium grown on grains or in liquids.
According to Bensky et al. (2004), laboratory-grown C. sinensis mycelium has similar clinical efficacy and less associated toxicity. He notes a toxicity case of constipation, abdominal distension, and decreased peristalsis, two cases of irregular menstruation, and one case report of amenorrhea following ingestion of tablets or capsules containing C. sinensis. In Chinese medicine C. sinensis is considered sweet and warm, entering the lung and kidney channels; the typical dosage is 3–9 grams. 
Some work has been published in which Cordyceps sinensis has been used to protect the bone marrow and digestive systems of mice from whole body irradiation. An experiment noted Cordyceps sinensis may protect the liver from damage. An experiment with mice noted the mushroom may have an anti-depressant effect. Researchers have noted that the Caterpillar fungus has a hypoglycemic effect and may be beneficial for people with insulin resistance.
References
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2. Winkler, D. 2008: The Mushrooming Fungi Market in Tibet exemplified by Cordyceps sinensis and Tricholoma matsutake. In: JIATS 4 (December 2008), In the Shadow of the Leaping Dragon: Demography, Development, and the Environment in Tibetan Areas. THL #T5571, 46 pp.
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15. Sharma, Subrat (2004). "Trade of Cordyceps sinensis from high altitudes of the Indian Himalaya: Conservation and biotechnological priorities". Current Science 86 (12): 1614–1619. http://www.ias.ac.in/currsci/jun252004/1614.pdf
16. "Tibetans, Chinese Battle over Access to Medicinal Fungus". ENS. 2005. http://www.ens-newswire.com/ens/jun2005/2005-06-02-01.asp
17. Winkler, D. 2005. Yartsa Gunbu - Cordyceps sinensis. Economy, Ecology & Ethno-mycology of a Fungus Endemic to the Tibetan Plateau. In: A.BOESI & F. CARDI (eds.). Wildlife and plants in traditional and modern Tibet: Conceptions, Exploitation and Conservation. Memorie della Società Italiana di Scienze Naturali e del Museo Civico di Storia Naturale di Milano, Vol. 33.1:69–85.
18. Harvesting and sale of Yatsa gunbu are featured in the 2008 BBC film documentary Wild China (Episode 3, "Tibet").
