Well, Coflein cynically has it that this is a "probable cattle rubbing stone." And who can deny that cows may have rubbed their bums on it over the years (photo here). But this article from Archaeologia Cambrensis in 1875 suggests it's more than just a cow convenience:
The Maen Hir in Glyllivon Park.
Sir, -- The Hon. Frederick Wynn, who has lately joined our Association, asked me to go over to Glynllivon in order to examine some markings upon the Maen Hir within the Park walls, traditionally said to mark the grave of "Gwydion ab Don". Accordingly I went there on Tuesday, Sept. 7th. The markings were soon disposed of, being attributable simply to the weathering of soft places in the stone.
Mr. Wynn then proposed digging at the foot of the stone with a view to ascertain if any interment had taken place there, and asked me where the excavation had better be made. The stone, which is 9 feet high above ground, has its sides facing east and west. The east side is nearly flat, and so I fixed upon that side.
A trench about 2 feet deep was opened, and at a distance of 3 feet from the stone and 2 feet 6 inches below the surface of the ground the workmen came upon a layer of calcined bones mixed with charred wood. On closer examination we found pieces of the urn that had once enclosed the remains. It had been apparently broken by the weight of the soil ages ago. We carefully sifted the earth around, as well as the contents of the urn, but found no article either for use or ornament. Portions of the rim and the bottom of the urn being preserved, we were enabled to judge that it must have stood about 8 inches high, with a diameter at the mouth of 7 inches, and across the bottom 4 1/2 inches. It has not been turned on the lathe, and is without ornamentation. Mr. Wynn subsequently dug on the west side of the stone, but found nothing. [...]
Gwydion ab Don stars in the Mabinogion - he's a bit more magical a figure than someone you'd expect to find buried under a real stone (for example, a Welsh name for the Milky Way is 'Caer Wydion', the castle of Gwydion).