You have a good understanding of simple machines for all sorts of functions. Levers, pulleys, clockwork, can all add up to tremendous feats of engineering. Think of the ancient siege weapons, devious traps, and other marvels of history. All of them were designed by the highest level of this skill (usually combined with supporting skills.)
Although clearly a valuable skill in ancient times, people often forget that the basics haven't changed. This skill is required before any advanced Engineering skills can be taken.