"She said she could play the piano"
Indirect speech isn't quoting the character's exact words but instead reporting what they/she/he said- It is also sometimes called reported speech
reported speech
[reported speech]
a speaker's words reported in subordinate clauses governed by a reporting verb, with the required changes of person and tense (e.g. he said that he would go, based on I will go).Also called indirect speech. Contrasted with direct speech.