The term wordsmith is formed by analogy with older words such as blacksmith, goldsmith, silversmith, and locksmith — all denoting skill and expertise with a particular medium. This is part of a complete episode.
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I often hear wordsmithing used in the specific context of group writing. While preparing a formal document as a group, we will come to a point where we have generally agreed upon what we want a sentence or section to say, but don’t want to take the time to work out the exact wording as a group. In these situations, someone will often suggest “we leave the wordsmithing” to one of the team to do after the meeting.