Workshop is essentially the place where you craft weapons, armor and potions, it just like a mini-Minecraft..
Weapon crafting: To craft a sword, you must find an ingot (be it iron, gold or mithril ingot, the better the quality, the better the weapon). Success in crafting will give you an exotic blade that always add +1 to your defense and +attack according to the quality in which your weapon is crafted. The better quality of the ingot, the higher is the difficulty needed to craft a sword (in which failure will result in the loss of the ingot or wasted time..)
Armor crafting: To craft an armor, you must find two ingots of the same type ('be it iron, gold or mithril ingot, the better the quality, the better the armor). Success in crafting will give you an exotic armor that will improve your defense but reduces your magic malus by 50. The better quality of the ingot, the higher is the difficulty needed to craft the armor (in which failure will result in the loss of ingot and wasted time'..)
Potion making: To create a potion, you need specific ingredients.
To create a healing potion: you need a nightshade.
To create a medicinal potion: you need a black pearl.
To create an antidote potion, you need a death cap mushroom.
To create a holy water potion, however, you must be a cleric and in possession of 50 golds for the ritual..
Difficulty:12 (Failure in creating a potion will result in empty-handedness, loss of ingredients and lost 1 day.)
A workshop also provides option to forge back Excalibur if you find the hilt and the blade, however..
Tip: Equipping yourselve with a hammer will increase chances of successfully crafting weapons, armors and Excalibur (+5 to forging.:-]) If you are a druid, you will be more succesful in creating potions (but until druid is implemented, we will have to wait.)