I've never had to describe this before. Never really heard it taught either. The dictionary defines discernment as "the ability to judge well" and "(in Christian contexts) perception in the absence of judgment with a view to obtaining spiritual direction and understanding." I like that. Judging well. And in this gift, it is of spirits. To me, the spirit is what resides within us. Our soul is our body and spirit combined. When we die, our spirit will wait until the time that it will be reunited with its renewed body.
There was 1/3 of the hosts of heaven who did not choose the Savior's plan. They chose the adversary, and as such did not receive bodies. They have wanted bodies ever since. We see this in the New Testament story when Jesus cast the evil spirits out of the man and they asked to be put in the swine. They would rather have the bodies of pigs than nothing. But the pigs did not want those spirits inside, and killed themselves to get rid of them.
Those spirits do not have to possess someone else's body, but they can be around. So, one with this gift would be able to judge well between the spirits that are around, whether they be good or evil. Breaking it down to define it, this seems like a gift that many righteous who pray for protection and guidance may have. Because it will be a gift that protects them and others. And it is certainly something we need in these days with darkness and evil all around us. I want to keep the good spirits close to me and the evil ones as far away as possible, so this is a gift I would like to have.