A Skeleton Key can be used to share access to a locked thing you own (e.g. Steel Door, Steel Trapdoor, Locked Chest) with other players.
Go to the locked thing you own to match the key for. Punch it to turn the skeleton key into a Key and permanently match it to the locked thing. Any player who possesses this key can now access the locked thing you have selected—but only this! Note that you don't need keys for the things you own. If the locked thing has been removed, the key will stop working.
See Key to learn how to use the (matched) key.
||Input → Output
Mods are able to add more locked things which are compatible with the key system.