The whole concept of "love medicine" kind of sounds Hogwarts-y to us, so we're totally into it—sign us up for Potions so we can make some for ourselves.
Seriously, though, even though we're not talking about witches and Harry Potter-style wizardry here, the phrase definitely implies some kind of magic. The first time the phrase comes up in the book is when Lulu remembers asking her Uncle Nanapush how he managed to drive Rushes Bear so wild for him (romantically, that is), even though she was always annoyed at him:
"What's your love medicine?" I asked Nanapush that evening, after I was allowed back inside. Rushes Bear had walked off, slower and more thoughtful as she moved down the hill, merely brushing the leaves out of her way. "She hates you but you drive her crazy." (4.1.13)
The implication seems to be that Nanapush had put some kind of spell over his wife to make her sleep with him despite hating him. Nanapush, however, denied the charge—he just chalked it up to his willingness to put a lot of time into lovemaking.
The phrase then comes up again later when Lipsha Morrissey is talking about his special powers, i.e., his "touch." His grandmother asked him to use his powers to work some "love medicine" on Nector, who seemed unable to resist chasing after Lulu Lamartine even though his memory was going in and out. Unfortunately, Nector choked during Lipsha's attempts to administer this "medicine"…
So, fine, we've listed all the big references to that titular phrase, but what does it all mean? Well, as we know from all the family drama—including all the extramarital affairs and their resulting children—love is really complex animal in this novel. Sometimes it creates big fat messes (as with Nector and Lulu), and other times it patches things up—like, for example, when Lipsha finally meets and connects with his father, and he suddenly seems somehow a lot more whole and peaceful than he has throughout the entire rest of the novel.
Bottom line: Love is a super mysterious thing with super mysterious powers for good and evil. Even if there's no such thing as a magical "love medicine," love is kind of a wondrous and potent thing just on its own for our characters… and that's pretty magic.