Everyone can train this skill, but they will automatically fail if their base natural charisma isn't friendly or even more.
You can change the attitudes of mobs with a successful Diplomacy check.
This is has mainly two uses:
In combat: you type diplomacy and everyone who is not grouped with you make a check, if they fail it they stop attacking your group and they can't attack your group for some time, if they are attacked they are able to fight back without problems. Alternatively if those mobs are not aggressive and you use it you could make sure that they will not join the fight if an aggressive mobs comes (if successful).
Out of combat: you type diplomacy <targetname> and for a very short time the target has his disposition to help increased (grating lower prices for training, repairing or selling to everyone) (maybe by reducing the target charisma or haggle?)
To use diplomacy you must known at least one language spoken by those who you want to use the skill against.
Someone who has been subjected to diplomacy can't be subjected to it for some time no matter if the diplomacy attempt was successful or not (maybe by granting a temporal affect to the mobs each time that someone tries to use diplomacy against them, so if you try to use diplomacy first the skill checks if exist that affect in the mob and if exists you get an echo like namemob seems to be ignoring you, failing in the use of the skill)