Its a rimfire blank gun for starting school races in the pre-PC era. Might take the 8mm rimfire blanks but difficult to say without a picture.

Harmless unless swallowed. Well, it is noisy if fired but that is unlikely now. Sell or give to a stage-school or theatre company if you do not want to keep it.

The toothpick is most likely for pushing the blanks out of the blank-holder once fired. They expand a little and won't fall out without a prod.