The description of this achievement is a bit misleading. Even when you discover the secret forge, the achievement doesn't unlock until you've purchased all of the items from the forge and are given the final item.
The Forge is located in the south eastern part of the Midlands of Mist. There is a dwarf running the shop. He will sell a total of 6 different items throughout the course of the game. Each item will show up after certain events take place. It's important to buy each item as they appear.
1. Intuition Pendant (250G) - Available from the beginning of the game.
2. Eagle Ring (300G) - Available after Benoit joins your party.
3. Magical Key (500G) - Available after hearing about the "rebel". This happens after speaking to Benoit's Uncle. So it will be after Benoit joins your party, but before Karine does. It's also good to note that the Magical Key is used to open up silver treasure chests, so it's a great item to pick up.
4. Splash Box (495G) - Available after Karine joins your party.
5. Morning Star (2500G) - Available after discovering the Monastary. Note: This is the last item you actually have to BUY. This is an excellent weapon for Karine.
6. Fairy Love (Free!) - Available after Hirado joins your party. Return to the forge and talk to the forgemaster. He will say that he's going on vacation and thanks you for being such a great customer. He will give you the Fairy Love for free and the achievement will unlock.