Peat contains humic acid. I am unsure of the exact science, but humic acid reacts with calcium and magnesium ions and causes them to precipitate (form solid compounds and fall to the tank bottom). The humic acid also lowers pH, since it's an acid.
Amazon floodplains are known for soft acid water because there is lots of old, dead plant material there that leeches humic acid and tannic acid into the water, tinting it a brownish color (which has come to be known as "Amazon Blackwater.")
Some people like to try to recreate the conditions and the color of the water in a "nature" aquarium by using peat and other "Amazon Blackwater" products.
Personally, I would say the preferred method for lowering GH is to use an RO/DI unit, then do a water change and replace with RO/DI water until your GH is where you want it.
If you want to use humic acid, I wouldn't use peat, I'd just add humic acid. Mardel makes a product called "Tank Soft
" which is humic acid plus a pH buffer to insure pH doesn't fall too low. I don't know what kind of buffer it is (carbonate or phosphate based). Ideally you would want carbonate based. I've never used this product; this is just what I know about it.