There is a potentially dangerous ingredient in it, but it's only in minute doses. Some apparently small percentage of the population is sensitive to Gentian Violet; it's listed by many authorities as a risk or danger but they say the effects are unknown, which is odd.
Apparently it's not for use in food animals but everyone does it, not that 'everyone does it' is ever a truly decent reason for anything. It can be one way to help save an animal's life, so it's the lesser of a few evils in most cases. 
Some basic info on it:
Best wishes.