Presumably chemicals in our drugs are often extracted from nature. why wouldn't the same chemicals in their natural form have the same potential to work?
True - but nothing to do with homeopathy. You are describing herbal medicine which certainly certainly works sometimes - though there are dangers from unknown potencies and interactions with other medicines. Homeopathic medicines are based on something that causes the symptoms they are intended to cure - but diluted so far that not a single atom of the original substance remains. It is sort of an analogy with inoculation - by giving someone a killed or weakened version of a dangerous virus, you protect against the full-blown version of the virus. But we know what is happening in this case - we are pre-loading the immune system. The mechanisms by which we prepare wakened virus are well understood. Homeopathy has a theory that, by means unknown, dilution beyond non-existence somehow infuses the water with a potency to counteract symptoms similar to those caused by the diluted substance. Unfortunately,there is no theoretical or (importantly) experimental backing for this.