The Hatchet is a melee weapon that is very useful for silently killing zombies. Unlike the Crowbar, it can kill zombies with a single hit, making it a much more useful weapon. It can also be used to harvest Wood Pile for making campfires.
While in a forest and standing next to a tree, you can harvest wood by right clicking on the hatchet. To do so, press the default key "G" to bring up your inventory, right-click on the hatchet and choose "Harvest Wood". This won't work outside of forest areas, so if the option isn't coming up, try going deeper into a wooded area. Forests are indicated on the Map as green areas.
Hatchets, Crowbars, and Flashlights are unique in that they can be carried as either tools or in a weapon slot. Crowbars and hatchets occupy the primary weapon slot, while Flashlights use the sidearm slot.
Currently, when using the Hatchet or Crowbar, the player must reload before it can be used to attack. This is a bug that should be fixed in the future. Despite needing to reload it initially, it will never run out of ammunition.