cold chisel is made from tempered steel which makes it a little harder than other types of chisels and other instruments. This is necessary because it is used to cut through other metals and therefore must be harder. It is also struck by another tool like a mallet or sledgehammer so it must be rugged and rigid.
cold chisel is used to hammer away or chip away at a metal while it is "cold" or after it has been forged and hammered. This is how the name was derived. A blacksmith will use them to hammer away excess metal, or to split a piece of metal that can not be cut by hand with a saw or grinder