When you carve a statue from a block of marble, you use a tool called a chisel to cut out the shape. Chisel is the name of the tool and also the name of the action.
A chisel has a flat, sharp end. To carve using a chisel, you hit the back of it with a hammer or another blunt instrument. Chisel can also mean "to cheat." If someone chisels you out of your allowance, they shaved it away from you bit by bit.