Chisel????
A wood shaping tool that is three letters could be: - Adz - Awl - Axe - Saw
plane
Rasp.
Axe, Awl, Adz
The type of tool you might be referring to is called an "Adz".It's an axe-like tool where the blade is at a right angle to the handle, the blade is curved for shaping wood.
The tool is used for cutting and shaping wood.
An adze
It is a plane
chisel
Knife
The adze is a wood shaping tool. The axe is a tool to cut wood. Carpenters Awl
Adz. It is an axe that has the blade turned 90 degrees so that when it is struck against a piece of wood it chips towards the worked. Then again axe is also a three letter wood shaping tool.