Sandling was the dæmon of a ghost-girl Lyra and Will met in the Land of the Dead.
Sandling hadn't settled, but he thought he would become a bird. His girl didn't want him to because she liked him to be all furry at night in bed. But he came to be a bird more and more the older they got.
Connection to his human
It is mentioned the girl loved him deeply and she misses him deeply now he is gone.
The reason of their early death is never mentioned.