Terrain editing with the hoe and pick shouldn't be that big of a burden on your fps

The exception would be if you're using mods to do large area shaping quickly, those mods still use the first iteration of how changes are saved, which was very taxing.

The current version is far more optimized and has very little impact on a decent set up, while on the other hand excessive fire/light sources, objects on the ground, or excessive npcs whether tamed or just present have a much higher impact.

There are examples in which the player had spawned in a ton of fish into a body of water and thus made it tank fps. Or just spawned hundreds of items and their system cant keep up.
Others have made large tree farms on slopes and just left logs piled up and the sheer volume of objects and the calculations that go into tree hp and movement tank the fps.

FPS tanks also happen in multiplayer situations because of how the peer2peer works and can get especially bad if someone has a poor connection or system, it will bog down the others.