Shovel - Used to dig for Dirt or Sand and the dig trenches for water/lava to flow into.
Hoe - Used for Farming wheat. Use this tool on grass to make fertile ground for seeds.
Pickaxe -Used to mine for Ore. The better the pick, the faster you mine.
Axe - Used to chop down trees or used as a weapon. The better the axe, the faster you chop.
Bucket - Used to pick up and carry Water/Lava.
Bonemeal - Used to instantly grow plants.