Henna leaves (Lawsonia inermis, L. alba, L. spinosa, Lythraceae) are used for hair dye, externally for impotence, as a fungicide and as a sunscreen. The active chemical constituent is lawsone. The formula is C10H6O3. Scientific papers on its synthesis and properties are listed in the Merck Index.
When dyes are used on skin, typically only the outermost layer is affected. Weak bonds are formed and it is the dye that has the colour, not the skin. The European Scientific Committee on Cosmetic Products and Non-Food Products intended for Consumers issued a report on Sept 17, 2002 identifying lawsone as toxic and recommended against its use as a dye for cosmetic purposes. You can read their report.