Summarize:

Press E to see what items you have, and to find the small crafting screen. This is a 2 x 2 grid labeled "Crafting," to the right of your character portrait. Each craftable item has its own recipe. When you drag the right items into the crafting area, the result of the recipe will appear in the box on the right. Minecraft doesn't tell you the recipes, so it's up to you to discover them. Example: Drag a block of wood into the crafting area, leaving the other three squares empty. The box on the right should show a picture of wooden planks, with the number four next to it. (To get wood, move your mouse over a tree trunk and hold down the left mouse button.) This will put it in your inventory, and destroy the ingredients in the crafting area. Example: Drag the wooden planks to your inventory. The wood you used to make them will disappear. The inventory crafting screen only allows you to craft certain items. To make most Minecraft items, you'll need a crafting table. Cover the 2 x 2 crafting grid with wooden planks to build one. Drag the crafting table from the box on the right to your hotbar. (Your hotbar is the line of items at the bottom of the screen.)  This recipe won't work if you just put one stack of four planks in the same square. Minecraft recipes care about what type of item is in each square, not how many items there are total. Right-click your stack of wooden planks to separate the items into multiple stacks. If you are on a Mac without a right-click button, use Control+click or use trackpad commands. Close your inventory by pressing E again. Select the crafting table in your hotbar. Move your mouse over a solid block, and right-click to put down the crafting table. Right-click the crafting table to open up a new screen. This looks similar to your inventory crafting screen, except it has a 3 x 3 grid. You can fit more items in this crafting area, which means you can make many more recipes. Minecraft is all about turning your items into better and better tools. Here's how to make a wooden pickaxe, one of the first tools many people make in a new game:  Drag wood into one square of the crafting area to make wooden planks. Place two planks in a vertical line in the crafting area to make sticks. Place three planks across the top row of the crafting area. Place a stick in the center square, and another stick just below it. This last recipe makes a wooden pickaxe. Equip it in your hotbar and select it, and you can break stone blocks. You can experiment to discover recipes yourself, or look up instructions online. Here are some useful basic recipes to get you started:   Make a sword to fight monsters.  Craft other tools to break down blocks faster or allow you to break more advanced blocks.  Get a stone axe and pickaxe as soon as you can, then mine iron ore so you can upgrade again.  Build a furnace out of cobblestone to cook food and to smelt iron ore into usable metal.  Make torches to light your house, preventing monsters from appearing inside.  Make armor out of leather or iron to protect yourself.  Craft a bed so you can sleep through night and set a new spawn point.
Open your inventory. Drag items to the crafting area. Drag the finished item to your inventory. Build a crafting table. Place the crafting table. Open the crafting table. Craft a pickaxe. Find more recipes.