Disintegrating is a process that destroys an item and returns some blacksmithing materials in return. You can disintegrate many items.

To disintegrate, you will need a Disintegrating Furnace. One can be found in any major city's forge (the place with the Blacksmith NPC). In front of the furnace, you will see an orange tile. Simply drop the desired item onto that tile, and it will be disintegrated if possible.

Watch this short animation to see how it works: