I imagine terraforming could work like architecture. You design the plot of land as you desire and then must provide the correct materials and labor and it will slowly fill in.
The architecture tool will likely work by the initial plan and then you build each modular wall piece up at a time with the materials nearby starting from the foundation up. So terraforming shouldn't work any differently.
Want to make a hill? Terraform the terrain in the landscaping tool that covers a certain radius around you to use the tool on. Push it up (think the Sims) and accept the changes. When you leave nothing will happen but instead a marker or icon will appear on your screen somewhere...maybe on the landscaping tool itself. Click it and it will ask for the needed materials. The materials must be on the land.
So you move a ton of dirt piles and rock piles (through wagons) to the land plot and then click the "Apply existing materials" button...your character will begin an animation and a bar will appear that shows the progress. The more people who help the faster the bar moves. If you run out of materials you can't continue until the materials are on the land.
When it's finished the land will poof into a big ball of smoke and then it will look like what you designed in the tool. It could be cliffs, it could be a ravine, it could be a waterfall, it could be a motte.