You create a dungeon by destroying blocks with a pickaxe. Each swing depletes one point from your power level. As you carve out tunnels and cul-de-sacs, you'll eventually take out colored blocks. Destroying these unleashes green blobs, the first creature in what will eventually become an entire ecosystem living within your underground lair.
Every creature you spawn in your dungeon has its own behaviors, lifespan and spawn conditions. Green blobs leech energy from green blocks, allowing them to grown and populate. As blobs wander around mazes, they spread excess energy along walls, sometimes creating more powerful green blocks that spawn more powerful enemies. Dead blobs produce flowers, which eventually attract small flying bugs. Lizards eat bugs and eventually produce lizard eggs, which bugs then destroy. The chain eventually grows to include fairies, dragons and other mythical beasts.