What about is specifically confusing you?

What were they? A powder fed to animals? mutated precursors?

So, any surviving Precursors met one of 3 outcomes. 1. Put themselves in suspended animation. 2. Fled beyond where the Forerunners were capable of traveling. 3. Rendered themselves into a fine powder that would be able to regenerate all of their past forms. For the powder 10 million years passed. Time made it defective. Through unknown means, the powder wound up on derelict ships, that crashed on uninhabited and habited worlds alike. Initial tests revealed nothing about it. Other than it made the Pheru, an herbivore humans and San 'Shyuum favored as pets, even more docile. After some time, the Pheru began to sprout soft, sensuous fur between their shoulder blades. Owners considered this a favorable mutation, and cross bred it with other Pheru. However, long flexible rods began to sprout out of their backs. Other Pheru were compelled to consume it, and even went as far as to cannibalize those who had it. This lead to mutations and abortions. It was so widespread, the Pheru were a lost cause. However, some humans found the Pheru to be a delicacy. Those who ate them changed. They began cannibalizing other humans, spreading this disease. Entire planets fell to the cannibals. Great cults and rituals were formed. Non-infected people would be fattened to ridiculous proportions, and then eaten alive. Then, they started changing. Weird growths formed, changing them, altering their appearance. It is here that the Flood was born. Hope that clears some stuff up.

And then they became a subforum on Bungie.net where they continue their reign of terror through insane forum banter, right?