Introduction
When a game needs you to create more powerful items, it is common for them to have you find the materials required to craft it. Crafting is a mechanic that every game does differently and there are a lot of good examples out there. When most people think of "crafting", they might think of Minecraft's implementation, but that won't work for every game.
Different Examples
Minecraft
Minecraft is a game, in which, the entire purpose is to collect items and craft items - hence the name MINE and CRAFT. Minecraft has combat, bosses, farming, biomes, and many other mechanics; but the goal is to do something to get an item, to craft it, or turn it, into a different item.
Minecraft's crafting mechanic is fairly complex compared to other games, which was made easier in newer versions. The basic idea is that you start off with a 2x2 crafting grid, which allows you to play 1-4 items in it, in a specific arrangement. At a certain point, the player can create a specific item, called a Crafting Bench, to give them a 3x3 crafting grid, however, they have to go to the location of one of the crafting benches to access it.
Minecraft has a similar mechanic for different types of crafting. They also have a "furnace" which can cook/smelt items, for example, 1 piece of coal can cook 8 pieces of raw beef to make 8 pieces of cooked beef. Then there is the brewing stand, blast furnace, smoker, and many other workstations that can convert one item into another. Each interactable utility block in Minecraft is used differently, has its own purpose or ruleset, and is required for advancement throughout the game; but it is just using the same crafting mechanic in different ways to build our their world.