If you have a fireplace:
1. Grab an old paint can, punch 20 holes in the bottom with a nail.
2. Heat up the fireplace, put the paint can inside and burn all the paint off.
3. When cooled again the next day, take out the paint can and fill it with woodchips (hardwood is better, pine bark chips are faster, olive pits are the best).
4. Close the lid but leave some room for it to breathe, a couple millimeters of open space on one side.
5. Heat up the fireplace again, put the can full of wood in there.
6. Let it burn for 5 hours, let cool.
7. Open can and there is your charcoal. Try burning a chip; as soon as it burns through by lighting just a tip, you have the good stuff.
If you don't have a fireplace, make a bonfire and do multiple cans at once because it's a lengthy process.
Industrial places do this at a larger scale, but it comes down to the same process. I've had discussions on how well charcoal is made by large companies compared to mine.. But all I have to say is that my buddies who won prizes with their barbecuing, are knocking at my door at midnight sometimes. And it's not because the stores are closed (yes, locally we do have a cooled beer taxi that also delivers cigarettes, snacks and charcoal).