The object of the game is to mix and match tiny elements to see what new items you can create. Every time you create a new item it will be added to the list of materials that you can use to make even more things. The items you unlock will appear in the Enclyclopedia.
When something new has been unlocked you will be able to yield additional items quickly by performing a series of actions. The first of which is combining the new item with itself and then repeating the process if it produces something new. Keep combining each new thing with itself until you can't go any further down that line. When an item is 'Final', it will disappear from your workspace and will not yeild a new item when combined with another.
The next step is to go into the Encyclopedia and carefully read the quirky profiles of the new items you have created to get ideas on what to combine next. When you have exhausted that route its time to go to the 'Items' tab in the Encyclopedia and study the list of growing categories and see if there is a combination of a conceptual item and an actual item and try and produce more things that way.