Rocky Dirt is a natural orange brown cubic block that replaces Dirt blocks only in Savannah Biomes. There, Rocky Dirt can be found directly under the topmost thin layer that is usually made of Savannah Grass.
Usually, the "layer" of Rocky Dirt is ca. 7-9 blocks deep until the Fossil layer begins that is made mostly from Stone at first, and a little deeper down from Bedrock, Limestone, Magnetite, blocks of Fossils and some more Stone mixed in.
Rocky Dirt is part of every newly created game world that is a random copy of one of the pre-generated template worlds. This natural block does not spawn any further after world creation, but since it can be made from Savannah Grass, which is a loot/pet-harvest of Shrewdshrews, Rocky Dirt too is an infinite material since update R56 on September 27th 2018.
How to obtain
Rocky Dirt can be "made" from Savannah Grass via AOE Gauntlet Smash too.
Rocky Dirt can change into Savannah Grass in time if the blocks of Rocky Dirt are "under the sun" and at least one block of Savannah Grass is adjacent (can also be underneath blocks of Rocky Dirt in order to make them "grow" into Savannah Grass themselves).
On the other hand, Savannah Grass can also be transformed into Rocky Dirt - by using an AOE Gauntlet Smash on it. No Power Cell is necessary for this. This ground smash can only be performed with 75% Stamina or more of the possible maximum Stamina, and a melee Weapon must be drawn (can be the default Twig too).
The Gauntlet Smash will be performed on the block directly in front of your player character even if you point your cursor at any spot farther away. This point of impact will then be the center of a star-shaped area of transformation of 3 blocks to all 4 sides on the ground, 2 blocks diagonally to all 4 sides, 3 blocks downwards at maximum and 1 block upwards.
The tips of the "star" (the third block to all 4 sides) outside the central 3x3 area of effect will be affected a little less by the Gauntlet Smash. On these "tips", plants like Savannah Tallgrass, Shrubs and Wildflowers will prevail. However, these three listed plants will only be destroyed if at least a Stone Mining Cell or better is equipped.
Neither the melee Weapon nor the Mining Cell will lose any durability when the Gauntlet Smash is used.
How to use
You can place Rocky Dirt blocks into the game world just like they are for building purposes, like any other type of crafted placeable block, by putting (a stack of) them into a slot of your quickbar, selecting this quickslot by number or scrolling and by then clicking your right mouse button while pointing at the spot where you want to place them.
Blocks of Rocky Dirt can be rotated in all directions by holding "R" (as the default key) and moving the left mouse button. The chosen rotation angle can then be "locked" too by simply typing "r", so that all items of the same stack will be placed facing the same direction.
You won't need to equip any Power Cells to pick up Rocky Dirt blocks that have been placed. Of course you won't be able to pick up such half-sized blocks on game worlds, on player claims or in Adventures where your Permission rank is not sufficient (mainly when you are merely a visitor), which can only be changed by the owner of the game world, the respective claim owner or Adventure creator.
Rocky Dirt, like all placeable objects and blocks, can also be put on display by placing them into the slots of display containers like Placemats, Stone Wall Shelves, Hidden Temple Altars, Galactic Grav-Chambers, Frozen Containers, Holiday Decorative Trees, Snow Buried Containers, Wood Planters, Flower Pots or the like, where it will usually be reduced in size while on display.