Arrows are the ammo used by dwarves for bows and by Nisovin for spells.
For dwarves, the arrows automatically regen, there is no way to craft them. However, if a Dwarf has Massive Quiver, each kill they get (Whether it's with a sword or bow) will restore one arrow. Arrows regen at 1 per 3 secs (or 1 back per kill with quiver) for a stack of 20 arrows it takes 1 min to regen them fully)
For skeletons, they just have what they spawn with.
Similar to vanilla Minecraft, arrows are the ammunition for all bow weapons. A bow will not fire without any arrows in the player's inventory. They are also used for Nisovin's spells.