This method of making Charcoal is relatively quick and easy. It does not require much work, and has a reasonable Wood to Charcoal ratio. Its only real drawback is that each Bonfire will only produce 5 Charcoal, meaning you will need many fires to produce bulk amounts. Therefore, this method is not recommended if you need Charcoal to fire a Master's Casting Box (600 Charcoal!).
First of all, you will need the "Controlled Burn" skill. It is available at the University of Body for free.
Next you will need to decide how much charcoal you would like to make. This should be a multiple of 5, as that is the amount that will be produced with each Bonfire. Now you need Wood to burn. For every 5 Charcoal that you want, you will need 10 Wood.
The next step is to set up some Bonfires. You can build and use multiple Bonfires at once. This will greatly speed up your production rate, so build as many as you feel comfortable with. You may want to try just one to begin with, to learn the process. I usually build 5, as they are easy to monitor without being too hectic.
Each bonfire should be built using 2 Wood. Build the Bonfires close together. It does not matter if they are overlapping, as long as you can click each one individually. Once done, click the first Bonfire and "pin" its menu box to stop it from disappearing. Move the box to the top left of your screen. Click the next Bonfire, pin its menu, and move it next to the previous one. Repeat for all your Bonfires so that you have a row (or two) of menus.
Now, click "Light this Bonfire" on every menu. On the first menu, click somewhere on the box (not one of the options). The menu will update itself, and should say that the fire is burning, and that it contains 1 Wood. So far so good.
Your objective now is to "stoke" the fires. Keep clicking the first menu every few seconds so that it updates. As soon as it says that the fire contains 0 Wood, click the "Add wood" button, and add 1 Wood. If you lit all the Bonfires together quickly, they should all be at 0 Wood now, so repeat the process for all of them.
Once done, keep clicking the first menu again to update it. Again, when it reaches 0 Wood, add 1 Wood to all the Bonfires. This process must be done 8 times after lighting the Bonfires, hence the reason you need 10 Wood for every Bonfire you build.
Once you have added Wood to every Bonfire 8 times, close their menus and leave them to burn out on their own. This will take a few minutes so its best to go and do something else. If you need more Charcoal, its a great time to set up some more Bonfires.
When the Bonfires burn out, they will leave 5 Charcoal each on the ground for you to pick up. Job done.
Thats all there is to it. While this method is slower than using a Hearth or Oven, it is much more efficient. For example, using the Hearth you are going to waste at least 50 Wood, probably a lot more. Unless you are in a desperate hurry for the Charcoal, the Bonfire method is much better. It also has the advantage of being completely portable. I often use this method at mines while waiting for the Endurance timer between pulls. That way you dont even need to take Charcoal with you to public mines, and there are usually trees nearby for Wood.