From Aika Wiki
The Crafting System in Aika can be used to make items that will help you in many ways. You can create your own equipment by combining items that you find while leveling, turn old potions into new, better ones, or even turn some low quality items into those of higher quality.
Crafting isn't too complex, and it can be very rewarding! You're able to craft items at the Anvil in Regenshein, or any other place with a similar crafting NPC. Simply head to the Anvil and start Crafting!
You may also notice, when crafting most items, sometimes you will get lucky and craft twice as many items! Just as well, when crafting equipment, there is a chance you will create a "Superior" item.
Also note that some items, such as Linen Threads and Coarse Skin Straps, will already automatically create twice as many items by default. So when you hit that lucky double up, you end up with four times as much!