Herbs work through their active compounds — alkaloids, terpenes, flavonoids, polyphenols, volatile oils. These compounds are what interact with your body's chemistry to produce the effects you are looking for. When a tincture is heavily diluted, you are simply not getting enough of these compounds per dose to create a meaningful physiological response. You would have to take an unreasonable amount of a 1:5 tincture to get the same effect as a moderate dose of a 1:1.