A Workshop is a building or location in a town or settlement that houses facilities to allow for faster creation of items of every tradeskill. Simply standing in a workshop decreases crafting time by 25 % (Example, an item that originally took 10 minutes will now only take 7 minutes and 30 seconds). However, once you leave the workshop, the remaining time increases back to the original, based on the percent completed (So if you completed half of the original 10 minute item at reduced time, and then left the workshop, the time remaining would increase from 3:45 to 5 minutes.) Certain more complex items will require you to stay in the workshop for the entire duration of crafting.
Workshops are located in most towns, and can be found easily by opening your overhead map and searching for buildings with the icon of crossed screwdrivers. Vendors for the Tradeskill typically reside within their workshop, providing easy access to knowledges and materials.