Grinding is a crafting skill which uses a single ingredient and grinds it in a stone mortar and pestle to create ingredients for cooking or other trades. You do not need any tools to grind ingredients, just hitting 'L' by default is enough.
For more advanced grinding you need to learn the knowledge "Grinding: Beginner" from Ornella in Heidel City. The quest line leading to her quest is given by Jemkas in Northern Guard Camp at Gathering level Apprentice (4). He asks you to use the fence and seed he gives there to plant the seed, then go to Alejandro Farm, followed by sending you to Workshop Manager Ficy in Heidel City. The latter gives you "Learning Higher Processing Skills" which are three quests, one of them teaches the knowledge of Grinding: Beginner.
Furthermore, Gems can be ground to extract Black Powder.