The history of the holy grail ritual is expanded upon in the heaven's feel route (the three movies). But in summary I would say for now that Irisviel acts as a vessel for that ritual. The old Einzbern guy we saw in episode 1 decided that it would be prudent to have a vessel that could defend itself, hence making the homunculus to contain the grail ritual. It wasn't initially part of the plan, but Irisviel was allowed to act more human than other homunculi before and was the first homunculus to experience of raising a child. As the ritual progresses and servants begin to be sacrificed the vessel starts to deteriorate (but was kept functioning through avalon for example) and turn back into the holy grail.