What does witchhazel do for hemorrhoids?

Depends. Witch hazel is supposed to sooth and reduce irritation. Unfortunately, over time many people will develop and skin sensitivity to witch hazel, like a contact dermatitis, so repeated use actually makes the problem worse. I do not recommend using any agent be it moisit wipes, cream etc, with witch hazel as an ingredient.
Gentle clean & sooth. Witch hazel, an astringent from the bark of hamamelis plant, is found in many over the counter hemorrhoid preps. Its effectiveness; it transforms/sooths the itchy thin skin, over the venous pressurized, irritated and dilated hemorroid. Rough scratching, or large caliber, hard stools can lead to even more irritation and bleeding.