Long story. Basically, the planet's own life energy was harnessed to cast a powerful protective spell that destroyed the meteor right before it touched down. But the biggest city in the world was ground zero, and just having that thing inside the atmosphere was destructive enough to crush most of what was left of it after everything else that happened.

[And they would never have needed to rely on Holy at all if Cloud hadn't let Sephiroth break him. But Rawne doesn't need any of those details.]