Being good in politics does not imply avoiding conflicts. It implies effective approach to them. Most importantly, ability to diffuse the conflict and ability to find solution that satisfy multiple parties is not conflict avoidance - it is rational approach instead of emotional angry one. The direct angry confrontation is sometimes part of conflict solution too, if you have that kind of personality, but even there you need to control yourself enough not to make complete fool out of you - and know when not to do so. Which is pretty easy for angry people.

The other part of politics is understanding what other people are up to and why they are doing what they are doing. Knowing who can make decisions, who can be trusted in what, who is stubbornly refusing change and thus it is waste of time trying to convince him etc.

I agree, but "avoiding conflicts" can make somebody look good at politics, until...

I would say instead, "Manage conflicts". That is, be able to constructively disagree with management above, below, and at your level, manage a reasonable discussion while advocating strongly for your position, and accept defeats and later "told you so" moments with grace and class.