Link has to go on trials to forge the Master Sword, and can find secrets by dowsing the environment.
Link will enter a new dimension in Skyward Sword, called the Siren Realm, where he will go through trials to forge the Master Sword, according to Nintendo's Eiji Aonuma at the E3 2011 developer presentation.
The Siren Realm appears to be reminiscent of both Twilight Princess and Link's recent DS outings. You must collect tear drops to exit the world and complete the trial. Additionally, you have to avoid powerful guardians that will kill Link in one hit, as he is unarmed in these areas.
Our green tunic-wearing hero also has the ability to dowse areas and look for hidden items. He points his sword at the ground and players use the Wii Remote's pointer to search the area for secrets. Link will later have metal gauntlets that can help him dig up items.
The dowsing segment showed during the presentation was from the second area of the game, which is based around a volcano. The residents of the area, tentatively titled Mogmas, hid five items, and Link has to find them. He is assisted by a spirit, who lives in Link's sword and was present in the game's initial concept art, plays the role of the helper character, much like Midna and Navi.
The demo showed was from the Japanese version, and is not playable on the show floor.