The Collaborative International Dictionary of English v.0.48:

Touchstone \Touch"stone`\, n.
   1. (Min.) Lydian stone; basanite; -- so called because used
      to test the purity of gold and silver by the streak which
      is left upon the stone when it is rubbed by the metal. See
      Basanite.
      [1913 Webster]

   2. Fig.: Any test or criterion by which the qualities of a
      thing are tried. --Hooker.
      [1913 Webster]

            The foregoing doctrine affords us also a touchstone
            for the trial of spirits.             --South.
      [1913 Webster]

   Irish touchstone (Min.), basalt, the stone which composes
      the Giant's Causeway.
      [1913 Webster]

WordNet (r) 3.0 (2006):

touchstone
    n 1: a basis for comparison; a reference point against which
         other things can be evaluated; "the schools comply with
         federal standards"; "they set the measure for all
         subsequent work" [syn: standard, criterion, measure,
         touchstone]