Sword and knife making has been a passion of mine since I was young. I've read much literature on the subject and have made a few knives but I haven't tackled a large project like a sword yet. I have dabbled in blacksmithing, including building my own
Lively style forge, although a hole in the ground works pretty well too.
Charcoal is definitely the fuel of choice. Coal was used more during the industrial revolution as supply increased and trees (to make charcoal) became scarce. But coal burns dirty and really isn't ideal for forging blades. There is a legend that in some isolated areas of Eastern Europe the smiths were able to use unseasoned wood from a specific tree, but I digress.
I have made charcoal. It is fairly labour intensive, and you lose a lot in the process. Here's a
link showing how they used to make it (and
another without pictures).
At any rate, my one admonition would be to remember that forging or 'blacksmithing' is only one step in the process of making a sword. After that comes the white work or 'whitesmithing' which is the removal of the black forge scale (like
this) as well as the further shaping and refinement of the blade which is done with files, chisels, drawknives, and coarse stones. At this point, before the final polish, heat treatment should occur. This involves heating to the critical (or non-magnetic) point, quenching, and then tempering which can be done in several cycles. It is quite an involved process that medieval smiths probably did not fully grasp as is attested by the large number of improperly treated swords (and many had no heat treatment at all!). But I digress again. Tempering will colour the blade (a straw yellow is the preferred colour for the edge) so more white work is required including polishing and putting a sharp edge on the sword. This white work, especially the polishing, could take weeks just by itself.
A huge pet peeve of mine is when sword making is depicted in movies as follows: heat the metal to red, pound on it a bit, quench, and voilą - a perectly polished blade emerges from the water
I also would not disregard the idea of specialists. There could be the master smith (who directs the hammering), the apprentices who do the actual hammering (usually two), the filer, the polisher, the hilt maker, and the scabbard maker (not to mention the jewel setter if the client was rich). There is certainly precedent for this. I don't know where the idea of a lone swordsmith came from. In fact, most local smiths, who would not have the skill or time to make a sword, would buy ready made blades (Germany and Spain were two legendary sources of blades) and simply fit a guard, handle and pommel on as desired by the customer. Scabbards would have to be bought elsewhere.
There is so much I could say on the subject and what I have said is probably over-simplified. I hope at the least that I have not confused the matter.