However, in Middle English, the meaning of skill varied a great deal, sometimes representing, for example: "a statement made by way of argument or reasoning."
I'm not entirely sure which root the Sanskrit form should be but it might be chid-, which fits with the Greek. In that case, I'd wager an Indo-European root along the lines of skedH-, with palatal k and laryngeal (IIRC, it's the laryngeal that gives the Greek z).
As for the derivation of the meaning, I think the notion of "separating right from wrong" is reasonable, but these things are often notoriously hard to pin down.
skita: old Swedish, Icelandic skíta; common germanic word (Ger. scheissen, Eng. shit), to an Indo-European root with meaning 'split, separate'