Understood to be essentially unskilled in diplomacy (5)
I believe the answer is:
tacit
'understood' is the definition.
(thesaurus)
'essentially unskilled in diplomacy' is the wordplay.
'essentially' means to look at the middle letters.
'in' means one lot of letters goes inside another.
'diplomacy' becomes 'tact' (I've seen this before).
The middle of 'unskilled' is 'i'.
'i' going within 'tact' is 'TACIT'.
'to be' is the link.
(Other definitions for tacit that I've seen before include "Understood without being put into words" , "Not said though understood" , "Implied without being said" , "Understood without being directly expressed" , "Implicitly understood" .)