Skills are broad categories of trained abilities that your character posesses. Skills have a rank of at least one which indicate how many dice are rolled when a test of that skill are made.
A rank of 1 in a skill indicates no training in that skill. At character creation, you have a 1 in every skill, and are then presented with a number of points to increase your rank. Experience points also allow you to buy more ranks in a skill up to a maximum rank of 4, though your race and perks may change how many ranks you can buy total.