Charcoal is a relatively simple technology, but enables us to heat things cleaner and significantly hotter than standard wood burning. Charcoal is created by burning wood, but limiting the amount of oxygen in the reaction.
Using the retort or indirect method, you place wood in a container and essentially cook it. The gasses are driven off and only charcoal remains.
You will require a large kiln with a chimney and a way to feed wood into the bottom, as well as a steady stand to place the inside container on.
The inside container must be fire-resistant (can use anything from a thick clay pot with a lid or a steel drum) but there must be holes in this container to let volatile gasses escape. Inside this container you will put the chunks of wood you wish to turn into charcoal.
Get a good fire going underneath the small container inside the kiln, and let the fire burn for around 4 hours. At this point most of the water and gasses should be gone from the wood inside the small container, so close the lid to the small container and continue to burn for 4 more hours, or until the inside container stops outgassing (jets of gas that ignite on the way out of the container).
After the outgassing finishes, remove the inside container and let it cool for about 12 hours, but do not open the container. The charcoal will complete it's transformation as long as it's not exposed to any oxygen.