Hi, Euphoria!

Welcome :)
I've never heard of this, but my (non-Japanese-gardener) mother has.

She says pith is a soft wood (similar to balsa wood) from the inner core of a tree or woody plant which is easily carved or formed, and which takes tints well. She's seen small (1.5" or so, or smaller) figures of flowers, birds, and frogs carved by Japanese artisans.

Hope others can add more info :)

- Evelyn