So will I be able to collect materials from the world (logs, sticks, stone, etc) and actually physically place down the logs to make a cabin? Or will it be similar to a blueprint system where you can choose from a pre-made list of buildings.
No, yes, no. There is an Architect Tool that lets people draw up blueprints.
>Also, materials such as bricks and other stone items, will they have to be smelted/heated up to form into other types of building materials (such as brick walls, etc).
Yeah
>Im also wondering will there be systems such as pipes for indoor irrigation, etc?
Highly doubtful as Soulbound has said in a Q&A that they aren't going to put a lot of time into water physics since it would have a negative impact of how well the game will play for many people. But maybe something like that will be discovered as people do various research.
There is a lot of info on this and I'm at work so I highly recommend you read DJ #14 and #15, they're chock full of good info. And welcome to the community!
https://chroniclesofelyria.com/blog/1203/DJ-14-Player-Housing-Architecture-Construction
https://chroniclesofelyria.com/blog/1365/DJ-15-PlayerCreated-Dungeons
Research info: https://chroniclesofelyria.com/blog/1109/DJ-13-Technology-Research
Edit: I don't know how to properly quote I guess :,(