You are on sentinel island to take over the battle tower and become a full-fledged dragon yourself.
The Bone Dragon Helmet and Bone Dragon Claw Piece are armors for you as a dragon. You can equip them while in dragon form.
The totem quest in sentinel island is simply a matter of finding the 4 totems (when you get near them, an animation will play of a totem popping up from the ground.) Each totem will give you a choice on who gets to live and who gets to die. So go ahead and explore until you find them all.
Make sure you talk to the people you are about to kill so you can make a decision. These people should be marked on your map, and usually the totems are very close to these people.
Tovi