My favorite LW explanation is Ms. Blue, meet Mr. Green. The short explanation is that while some woo is just outright crazy, much of it is valid in the sense that it is describing ways of manipulating your own consciousness and subjective experiences. This can be used for beneficial psychological effects.
Terms like "energy" should be interpreted to refer to, not energy in the physical sense, but rather sensations which feel like energy and which can be manipulated to achieve various internal effects. From the post:
In general, if you translate all mystical statements to be talking about the internal experiences, they’ll make a lot more sense. Let’s take a few common mystical concepts and see how we can translate them.
Energy -- there are sensations that form a feeling of something liquid (or gaseous) that moves within or outside of your body. When unpacked, it’s likely to be made up of sensations of light (visual), warmth, tingling, and tension (physical). “Channeling energy” is adjusting your state of mind so as to cause these sensations to “move” in a certain way, to appear or disappear.
Chakras -- points in your body where it’s particularly easy to feel certain types of energies. It’s also particularly easy to visualize / feel the energy moving into or out of those places. “Aligning chakras” is about adjusting your state of mind so as to cause the energy to flow evenly through all chakras.
(Chakras are a great example of a model that pays rent. You can read about chakras, see what predictions people are making about your internal experience when you explore chakras, and then you can go and explore them within yourself to see if the predictions are accurate.) [...]
Auras -- when you look at a person and they are scowling, you might conclude that they are angry. They have a “danger” aura. If I blurred their face, and you were particularly perceptive, you might feel the aura even then, based on their body language or other cues. Some people can pick up on pretty surprising things, like a person being sick or struggling with an internal dilemma, all the way to being able to “see” things about their future.
Auras are subconscious visual representations of emotions (how a person is making you feel / presenting themselves) that you become conscious of. Some people actually have the sensation of seeing the aura, where it’s as real to them as the candle light.
Another nice resource is Eric S. Raymond's Dancing with the Gods, where the author discusses mysticism and religion in similar terms - not as a set of beliefs to uncritically accept, but as a set of practices which can be used to get yourself into useful psychological states.