It was once thought that creating a Wand of Fear required the arm of a lich, but today that is scoffed at as peasant lore. While most examples do contain fragments of bone, the sample need not come from such a powerful undead creature. Ordinary skeletons serve just as well, and object far less to the procedure.
Wands cannot be equipped to any of your inventory slots. You may assign a wand to your quickslots.