[Tuidjy]

I think that you are getting bogged down in this forum's terminology (jargon).
Lets try to explain what a few sentances mean...

The dwarven hammer is Construction 4 item that requires Earth 3, and provides
a forge bonus of 25%.

This means it requires Construction 4 to be researched before it can be forged
by a mage with at least three levels in Earth magic. Incidentally, the forging
of this item will use up 15 earth gems, unless you have some forging bonuses.
The forge bonus of 25% means that when you forge other items with a mage that
is wielding the hammer, you will use 25% fewer gems. For example, if you are
forging a hammer with a hammer, you will use only 12 gems. If you have a druid,
with one level of Nature magic, and he is using the hammer to forge an item that
usually requires 5 nature gems, he will need only 3. Note that the druid has
no Earth magic skill, but can still use the hammer.

Ah, anyway... I am not doing too well at writing this post, keep getting
distracted. I am sure by now other people have answered better than I did.

Just a piece of advice - unless you are playing Mictlan, you do not have to
understand blood slaves. Blood magic is an advanced topic, and many really good
players will not touch it, but still do very well.