When checking your inventory you will see 4 selections at the very top. Those selections have to with the different crafting-like abilities available to you. One contains all of the regents you find. Essence of fate is hidden on some parts of the land and can be picked. Some are acquired the quests. The rest must be aquired through reckoning mode. Ideally, you should do reckoning mode whenever you are fighting a large number of enemies and one is an orange. Kill all of the yellow or less enemies while in reckoning mode and perform a fateshift on the orange (I always consume a exp potion, force potion, and precision potion during to make sure I don't run out of time and max the exp gain). The more you kill during reckoning mode, the higher the percentage that each one will drop an essence of fate and thus the more you will get. The higher the level of your opponent the more they will drop. An example is a grey may drop one on a goo day, while a yellow may drop more than one, while I have received as many as 8 from one orange boss (and over 30k exp in some cases with the EXP bonus potion).
Essence of fate is absolutely, 100%, necessary in order to create the most important and strongest potions in the game. Master Force, Master Precision, and Master Magic Amplification are incredibly important and essential to not dying quickly in some battles later on.