Masterworking is the process of using Silver Ingots to increase the overall power of crafted armor and weapons by adding new properties to them such as increased stats, bonuses to combat skills, and defensive enhancements.
The recipe for Masterworking simply requires a crafted weapon or piece of armor and 5x Silver Ingots.
The process for Masterworking is the same as crafting the item (see Crafting 101 for more details)
As your skill with Masterworking increases, your enhancements will become more powerful and you can unlock specializations to further increase your power and success rates.
Each successive attempt at Masterworking will drastically reduce the success rate and there is a maximum of 4 successful applications. Starting with Release 53 (April 26, 2018), failure at a Masterworking attempt will no longer destroy the item, but will now result in reduced durability of the item.
More detailed guide coming soon!