The Wood Sword provides 10 damage points (while the Twig merely does 4 damage points).
From time to time you can find (already crafted) Wood Swords in Stone Treasure Chests in the Fossil layer underground that is accessible through many shallow Caves, and sometimes a Keepa will drop a Wood Sword in it's Loot Bag or you can get it from tamed Keepas as a pet-harvest.
However it's easier to craft the Wood Sword yourself - in your Crafting Menu (default key "Q") or at Crafting Tables (that still exist in older worlds created before September 2015).
To choose different alternative materials for crafting you can click on any material-icon that has 2 small golden arrows to scroll through all available options - for example any type of Wood or Log for this weapon.
To craft one Wood Sword, you'll need ):
- 5 (blocks of) any kind of Wood (except for corrupted wood) or Logs, found in Woodlands, Forests and many other Biomes and can be harvested without needing any Power Cell
- 1x Vines, taken from Cragwood-trees in Woodlands or Forests, or from Wildwood-trees in the Jungle, or obtained from several kinds of Leafies
The crafting-recipe for the Wood Sword is already known/unlocked right from the beginning. Crafting/taking a Wood Sword is the unlocking requirement for the crafting recipe of the Stone Sword.
To actually be able to use the sword you must equip it. If you had no sword in hand before crafting your first Wood sword (or any new sword), it should go directly into your weapon equipment slot after being crafted.
Otherwise right-click on the sword in the inventory which will then place it into the weapon-slot next to your character's portrait on the right side. Afterwards you can switch between weapon-mode, tool-mode and harvest-mode with TAB (default key).
Durability: Whenever you hit a creature with a sword, the weapon will lose a bit of durability until it falls apart completely. The durability is indicated by a bar over the icon of the sword - in your equipment slot next to your character's portrait as well as on the main screen visible over the weapon slot. You might want to be prepared and take a new sword with you if your current one already hasn't much durability left!