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.