So, if I write my API endpoints a certain way, the skill would describe that specific process. Later, an agent can "see" this skill, load it when it's relevant to current chat context, and then do whatever is instructed.
Similar to "tool calls," but instead of being a function you can call, it's just instructions for how to perform that "skill."
At least for the agent I use (Cline), you can define skills either globally or locally (project level).