You can create all the kind's of stuff in the world here, pretty much. So let's get started!
By combining at least 2x materials/Tool's in your rucksack (inventory) you can craft various item's. The most important example is the Hammer. -Which is made by opening the rucksack, selecting a Branch and a Stone, and finally pressing the create icon [+] at the bottom of the inventory screen.
Other tools include: