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Soft areas along the trunk may indicate rot, which can occur with damage or overwatering. If this is the case, it may be hard for the plant to recover. However, some people have had success; if lucky, the top might die off, but the plant recovers by forming shoots lower down, turning the plant into a multi-trunk palm. The best you can do, is probably give it extra TLC--make sure it is getting lots of sunlight, has plenty of drainage, is in a warm spot, and is getting watered only when it feels dry down to an inch in the soil (usually, water every 1 to 2 weeks). Do not overfertilize.
On the other hand, a shriveled stem and browning leaves can also indicate not enough water. Make sure that it is getting the proper amount of water, that the soil is draining from the pot correctly.
If your plant has offshoots (babies), or seeds, then you might look into propagating it in case the original plant does not survive. Good luck!
Ponytail palms are slow growers. But if it's in the middle of the room, perhaps place it more directly by a window (but be careful of cold drafts)--these plants love lots of sun, at least part of the year. Also, make sure that the soil is a well-draining type (a cactus mix works well), and that it has a drainage hole that isn't blocked. Water about every 1 to 2 weeks; give it a good watering, and let it drain out. Do not water unless the soil is dry at least 1 inch below the surface--or even more. Good luck!
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You can cut the brown tips off. It's normal for the lower leaves to turn brown and eventually dry up. If you have brown tips on the upper leaves try moving the plant closer to a window so it gets more light.