This skill lets you do more damage with short blades and parry with them more reliably. Note that no level of mastery will let you do great damage with mundane weapons.
The ingame help reads:
Skill duration: random. Type of skill : weapon skill. Affecting stats: Str/Dex. It uses no endurance points. Once you have a weapon, such as a dagger or other smallish blade in hand, you will realize that using one is not as easy as some make it look. In order to effectively make use of these crafty weapons, one must know how to wield them to make best use of their potential. Knowing when and where to attack your foe can make all the difference. While the best use of short blades is to make sneak attacks, such as a strike to the back of an unaware victim, they can come in handy in a fight if you have no better weapon available. Physical prowess can help even a master wield his weapons more effectively.