Hi,
I will give an example.
My wife cooks very well. Everyone praises her for her ability to provide excellent, tasty food. She has an excellent skill of cooking.
One day, after we finished our dinner, a few relatives from outstation arrived, and there was no cooked food at home. She was in a fix and required at least one hour to prepare anything. There were no vegetables or milk at home. She went to the kitchen, called me, and asked me what to do. I had no clue, but I suggested waking up my mother, as she used to handle such situations when we were young.
My mother came, prepared some kitchadi in 10 minutes, served it hot with pickles and curd, and the guests said they hadn't tasted this kind of delicious food anywhere!
She had the competence to handle the situation.
Skill is knowing what to do and how to do it.
Competence is knowing what to do, how to do it, and more importantly, when to do it.
Remember the story of Karna. He forgot the mantra when he was about to use the Asthra on Arjuna due to the curse of Parasurama. Let's forget about the curse. The fact remains that Karna forgot the mantra when he was supposed to remember it. That is a lack of competence (I am not suggesting he lacked competence or creating any controversy here; it's just a situation I am quoting).
Is it clarifying or confusing?
Siva