There are 18 different skills that you can level up. Depending on which Race you choose, some of your skills will receive a bonus starting level. Skills are leveled up by using or doing the action that skill is for. For example you can level up your One-Handed skill by using one-handed weapons. You can also pay certain characters in the game to increase your skills and there are Skill Books that increase a certain skill when read. Additionally, as you level up your character you unlock points that can be spent on Perks for different skills.