Let me try answering ur query: first and foremost we define competency.
What is Competency?
Any underlying characteristic required for performing a given task, activity, or role successfully can be considered as competency. Competency may take the following forms: Knowledge, Attitude, Skill, Other characteristics of an individual including: Motives, Values, Self concept etc.
Mind you, the important words in this definitions are characteristics and successfully. as explained further, these charateristics can bein the form of knowledge, attitude, skills, motives, values and self concept as well.
Competencies may be grouped in to various areas. In classic article published a few decades ago in Harvard Business Review Daniel Katz grouped them under three areas which were later expanded in to the following four: Technical. Managerial, Human and Conceptual. This is a convenience classification and a given competency may fall into one or more areas and may include more than one from. It is this combination that are labelled and promoted by some firms as competency dictionaries. A competency dictionary of a firm gives detailed descriptions of the competency language used by that firm. It contains detailed explanations of the combinations of competencies (technical, managerial, human and conceptual knowledge, attitudes and skills) using their own language. For example Team work or Team Management competency can be defined in terms of organization specific and level specific behaviors for a given origination. At top levels it might mean in the case of one organization ability identify utilize and synergize the contributions of a project team and at another level it might mean ability to inspire and carry along the top management team including diversity management. In competency mapping all details of the behaviors (observable, specific, measurable etc.) to be shown by the person occupying that role are specified.
So, in a way competency encompasses skill. For eg. being a skilled goldsmith is a technical competency
I would like to acknowledge that the excerpt has been picked up from the following website : http://www.tvrls.com/competencymapping.htm. For the history, you can check up the website.
Hope this will help : )