How Crafting Works
Using the Workbench
Crafting is different from forging. For more about forging with steel, see this page.
You will need to find a workbench to craft most items. By clicking on the workbench you can see what is available to craft and what ingredients and tools are required. The tools and ingredients need to be in your inventory before you can start crafting the item.
Some items take a long time (dozens of hours) to craft and will let you select how long you want to work on it in one sitting. That lets you break the workload up into several days if needed. Until the item is finished, it will remain useless in your inventory. Some items (like arrows) can only be crafted in one sitting, so make sure you have enough time available. You cannot craft when it's dark.
Using the Quick Menu
Some smaller items can be crafted directly from your quick menu without a workbench. Open the quick menu and select the crafting category. It will show you all the craftable items but they will be grayed out until you have the necessary ingredients in your inventory.
Crafted items lose condition and break just like any other item. Some crafted items can be repaired (like clothes), while others cannot (like bows and arrows).
Crafting Ingredients
All crafting ingredients must be found or harvested. Some ingredients will respawn ("re-appear" after being picked up) but some others do not. For more on item spawning, see the items page.