Originally posted by Faitheal:

terra-forming the ground in this game creates major lag problems. This is unfortunate obviously.

This is mostly a myth I believe, which originates way back when someone figured out that terraforming makes the game object instance count to go up and made a reddit post about it iirc. The game was patched since, the instancing behavior was changed so it should be much better now. The loss of fps is mostly due to light sources as people pointed out, and generally just having a lot of build pieces added to the environment. Having lots of farm animals in the same area is also known to cause lag as their pathfinding burns a lot of cpu cycles.

(Also this terraforming theory should be easy enough to test but to my knowledge nobody has done so. You could find a clear spot in the meadows, mark a standardized point of view, observe your fps, then go ham with the pickaxe at the terrain making small changes to the elevation of the entire visible area. Then you'd go back to your marked point of view and observe the fps again. Wouldn't expect much difference at all.)