To make a village, drag any icon and press space to stamp it. The blue dot is for making rivers and lakes, and the blue rectangle is a bridge. To change the direction of the bridge, press b. Change the location of the first slope leading to the beach with the left and right arrow keys, and the second slope with the a and d keys. If you have a really wide river, put multiple bridges on the river.
I am giving credit to the creator (or creators) of the Animal Crossing game series. If you have never heard of Animal Crossing, then just so you know, it's really fun.