Torch creation lets you make one or sometimes two torches per successful use when outside. Torches have a variety of uses, so it can be handy to be able to make them on demand. This is a very straightforward utility skill.
The ingame help reads:
Skill duration: 12. Type of skill : neutral skill. Affecting stats: None. It uses 7 endurance points. One of the realities one must face in the world, is that it is usually light by day and dark by night. Those who need light to see, often come into trouble when night comes. While lamps and magical lights are readily available near civilized areas, out in the wilderness, sources of light are not easy to come by. For the most part, just setting a branch on fire doesn't do the trick, as the branch burns dimly and then out in a matter of minutes. Being able to find the right type of wood and ready it with special oil and cloth to make it burn brightly and for a long period of time is what makes the art of torch making.