Aristotle distinguishes two rational faculties. One grasps necessary truths — the objects of science and mathematics, which could not be otherwise. The other deliberates about contingent matters — things that can be done or not done, chosen or avoided. Practical wisdom belongs to the second faculty. It is reason applied to action, not to theoretical truth.
Practical wisdom is not cleverness — the mere ability to find effective means to whatever ends one happens to have. A criminal can be clever; the practically wise person must have genuinely good ends. It is not the same as knowledge of general moral rules, either — knowing that one ought to be courageous does not tell one what courage requires in this specific, complex situation. Practical wisdom is an irreducibly perceptual capacity: it sees what is needed now.
Aristotle's most important claim in Book VI is that moral virtue and practical wisdom are inseparable. Virtue without practical wisdom is blind: it produces good intentions but not reliably good actions, because it lacks the judgment to translate intentions into the right response in complex situations. Practical wisdom without virtue is hollow: it produces correct calculation in the service of bad ends.
What makes practical wisdom so demanding — and so important — is that it cannot be reduced to the application of rules. Moral rules are general; situations are specific. The person who follows rules mechanically, without perceiving what the situation actually calls for, will repeatedly get things wrong. The practically wise person does not consult a formula; they perceive the morally relevant features of the situation and respond appropriately. This perceptual skill is developed through experience and cannot be shortcut.
Practical wisdom is the central subject of Book VI of the Nicomachean Ethics. Aristotle's account of phronesis is one of the most influential treatments of practical reason in the history of philosophy.