Using watercolor pencils is very similar to using a 'normal' pencil or color pencil. You hold them the same way, you sharpen the same way, and you can erase them.
It's when you add water into the equation that their uniqueness appears. There are different ways you can do this. For starters, you can do by painting with clean water over your drawing. But you can also lift paint off the pencil with a brush then apply it to your paper, wet the pencil then draw with it, or wet the support you're working on.
Applying a Wet Paint Brush to a Watercolor Pencil Drawing
By 'painting' over watercolor pencil with a brush that's been loaded with clean water (or a waterbrush, the pencil lines 'dissolve' into watercolor paint. The intensity of the wash produced depends on the amount of pencil that had been applied to paper. The more pencil 'lead', the more intense the color. (It's easier to lay down color using a blunt pencil rather than a sharp one, or using a water-soluble crayon rather than a watercolor pencil.)
Be selective in which areas you turn into washes to make the most of the unique properties of watercolor pencils (if you turn every bit of watercolor pencil into watercolor wash, you may as well have used watercolor paints to start with).
Picking Color Up From a Pencil With a Brush
To load a brush with a particular color, treat the pencil tip in the same way you would a pan of watercolor: wet your brush, then use the brush tip to pick up the color from the watercolor pencil. (See step-by-step photos showing how to do this with a waterbrush.)