Proficiencies are a passive addition to the enhanced effect given to the item or skill it represents. Additions to proficiency levels are represented as ranks. You gain progress for your proficiency by using the given item or skill. For example, if you use a sword, you will work towards improving your sword proficiency. If you successfully fish, you will gain progress towards your fishing proficiency.
Deaths reflect negatively on all of your weapon and charm proficiences and will lose a percentage of your accumulated progress if you die. With crafting proficiencies, you are unable to lose any percentage for failing to complete a certain crafting task, or by death.