Musicianship is part of the Bard class skill set. The skill is used with the help of a musical instrument.

All musical instruments can be bought from Bard NPC.

Skill’s efficiency

Whilst using a musical instrument near any player’s character all of his properties are being restored.
The restoration depends on the skill level and the character’s level.
Your dexterity is decreased when using a musical instrument.

Ways of leveling your Peacemaking

You should buy a musical instrument from a Bard NPC to start training the skill. All the musical instruments are equal and their kind doesn’t affect the training.

Train your Peacemaking and Musicianship at the same time.

Here is a detailed video of how the skill is used: