How to craft equipment?

Crafting is done at the Blacksmith. Tap the Blacksmith building (or build it if you don't have it already), then tap the furnace icon, you can then see what items can be forged.

To craft/forge items you'll need the blueprints and the correct materials, so it may be the case you can't carft anything right now, and you need to collect more materials and blueprints.