Defeating a Slime will score you a Blue Oil drop.
You can then combine the Blue oil and a Thick Branch to make a Torch.
Similar to Minecraft or Terraria, theres a hunter meter as well as an HP meter. When your hunter meter empties out, itll start chipping away from your health.
By making a building that is at least two blocks tall, adding a door and torch to it will make it into a house.
By meeting certain requirements, the name of your house changes. For example, placing a Straw Bed in an empty room makes it into a Bedroom with Straw Bed.
Once you expand into a base, youll have residents appear. Having residents around will be very useful, as theyll do things like make items for you on the workbench.