Step 2: Cutting that wood
Of course there are machines that can help you cut thick logs in seconds, but (1) we are intended to work with rather thin pieces and (2) we are on the cheap!
When you want to smooth the borders or surfaces of your piece of wood, you will first use the rough sandpaper and the softer sandpaper later on, if needed. There's also an iron tool that you can use for smoothing, namely a file. I have a set of 3 files with triangular section, each with different roughness. Files are useful to give shape to the wood as it can remove a big amount of wood chips in a controllable fashion.
When you need to quickly cut a surface to render it as flat as possible, there's a tool for that, called "plane" (thanks to those who provided that name!)