If skin is lacerated, it's deeply cut or badly torn. After falling hard on your skateboard, you can tell your knees are lacerated by the blood seeping through your jeans.
Doctors use the word lacerated to describe particularly jagged wounds or cuts. If your skin is lacerated, it needs to be disinfected and possibly even stitched up. If you have a painful mishap on your unicycle, you're more likely to call your injury a "cut" or "wound," but when you go to the emergency room, they'll describe your arm as lacerated. The Latin root means "tear to pieces" or "mangle."