Dirt (or rather soil) is a very common cubic natural block most often found right under the top surface layer of many Biomes as well as further down on the Fossil layer where shallow caves and tunnels often lead into.
Dirt sometimes lines coasts of biomes next to sandy beaches, and it also forms the top layer of high Canyon formations.
It seems that Dirt can only very rarely make Pigsies spawn during the (ingame-)day and Night Pigsies or perhaps even Night Hoglets at night, but perhaps only in fitting Biomes or in combination with other natural ground blocks.
How to obtain
Dirt can nearly always be found under any thin layer of green Grass (in Grasslands, Woodlands, Forests, Swamplands and in valleys between Mountains), under Dead Grass in Tundras, under Snow Caps and Matted Needles in Taigas, under Detritus in Jungles, on top of high formations in Canyons and as a transition between the Shorelines of Oceans and adjacent warm Biomes like Jungles or Savannahs.
Dirt is a very soft block and can be taken up (mined / pulled) without requiring the mining strength of a Power Cell.
Brown Mushrooms are embedded in Dirt every once in a while, but usually only underground. When pulling these mushroom-interspersed blocks with the Arctek gauntlet, they will turn into 1 consumable Brown Mushrooms in the inventory or the quickbar, without providing additional Dirt blocks.
How to use
This does not require any crafting recipes to be unlocked first. Just carry blocks of Dirt with you when you activate a Processor in the game world and then place Dirt blocks into the Processor with right-click or drag & drop. Green Grass blocks can also be processed into slopes and slabs.
Since update R62 on April 19th 2019, Dirt can be used for crafting Mud in your Crafting Menu (to be opened with Q as the default key), but only after the according crafting recipe was unlocked by obtaining Water. Water can be scooped up from rivers, lakes or Oceans without the help of any Power Cell.
Then, 4 blocks of Mud can be crafted at a time from 1 block of Dirt and 1 unit of common blue Water.
Other than that, Dirt is a crafting ingredient for Wood Planters.
Growing Mushrooms and Trees
All 3 types of Mushroom Spores can be placed directly on Dirt in order to grow into Mushrooms in 10 minutes. However, Mushrooms will only grow from Spores if suitable liquids like Water, Bog Water (not too much of this) or Mineral Water are placed directly adjacent to the block where you want to grow the Mushrooms.
Otherwise the Spores will stay fallow until you apply moisture next to their soil. Sunlight or fertilizer is not necessary in order to grow Mushrooms, but if you place Pigsy Droppings on the placed Spores, they will grow into Mushrooms immediately - as long as the Spores aren't fallow.
All 3 types of tree Saplings can also be placed on Dirt in order to grow into trees. Tree Saplings do not need any moisture (different to the tips that sometimes appear on loading screens ingame), but they do require sunlight to grow, and a suitable biome. Usually, Forests and Mountains are well-suitable for growing trees, as well as parts of Tundras, Swamplands and Grassland close to other biomes.
Transforming Dirt into Grass
Blocks of Dirt - just like in Minecraft - will automatically turn into green Grass when at least one block of green Grass is placed adjacent (without being rotated) and the Dirt is left uncovered. Sunlight is not necessary for this process, as the change also will happen underground.
However, in Swamplands and in other biomes (especially close to trees) the change from Dirt into Grass can be exceptionally slow or come to a halt completely - perhaps because of the same reason that renders Swamplands Seeds, Queen Bees and Saplings fallow.
In general, the transformation of Dirt into green Grass takes a lot longer in dim-lit areas than under the open sky. Player-characters being close by will usually make Dirt change into Grass faster in return.
Sometimes, already transformed Grass blocks might have returned to being Dirt when you return to the area or relog; and will only then start to "grow" (into) Grass again.
Savannah Grass, Dead Grass, Detritus or any other blocks won't have any effects on Dirt. On Rocky Dirt, Savannah Grass may grow in time though as long as the Rocky Dirt blocks are not covered with anything on top.
Corrupted Dirt can be purified into plain Dirt either by placing at least one Healing Beacon close enough to it, or by throwing Purification Bombs at Corrupted Dirt. Mineral Water cannot purify solid Corrupted Blocks.
Tilling Dirt to farm Crops
Dirt can be tilled with Plows and can then be used for growing Crops by planting Seeds on the tilled land. If tilled land is not covered by any items or blocks nor planted, it will turn back into Dirt in time.
To make Seeds grow properly, each block of tilled land has to touch a block filled with Water, Mineral Water or Bog Water (not too much of the latter though!), to be moistened. Sunlight or any light at all is not required for farming in Creativerse, it can also be done underground. However, Seeds might still stay fallow in unfitting areas, especially in Biomes that are too hot or too cold, which also applies to high altitudes or to the Lava layer underground.
Blocks that turn into Dirt
Snow Caps will turn into Dirt when drying in warm to hot areas.
Mud and green Grass will not turn into Dirt by themselves, but both natural blocks can be plowed; and this tilled land can then revert into Dirt when left untouched for a longer while. Since tillable Mud is a rare drop or pet-harvest from Pebbles, Rocksters, Night Rocksters and Rockzillas, this also makes Dirt a renewable resource, even though it cannot be obtained from Creatures itself.
As part of the Corruption "Sim" (corruption spreading) in earlier versions of the game Dirt could turn into Corrupted Dirt by placing Corrupted Water on or next to it; and in even earlier versions, Dirt could even become corrupted if it touched any solid Corrupted Blocks. This is not longer the case.