Shields are a usable item designed to deflect damage. They can be held in the offhand or main hand, though typically the former. When blocking with right click, shields are able to deflect both melee and (unlike parrying daggers) ranged attacks in the direction the player is facing, as long as the attack are physical - shields do nothing against things like splash potions. Certain shields have drawbacks - when wielding the obsidian shield, for example, the player will be slowed down. It should be noted that shields are not impervious: certain blows, such as from axes, can disable blocking with the shield for a short time, leaving the user vulnerable to attack. This, however, should not effect any stat changes the shield provides.
To craft the majority of shields, a basic wooden shield must be crafted and used as a template - it requires six planks and one stick. For the starting shields, a better material only changes the durability: all shields perform their base blocking function to the same effect. More advanced shields can be crafted using the ancestral infuser and can usually be used as baubles for special buffs, such as the Ankh shield.
There are certain un-craftable shields that one can find in chests in the overworld that work differently from other shields. To start, these shields do not take durability damage from blocking, whether it be by blows or arrows. The only way they take damage is from shield-bashing: if you left-click while your weapon is recharging its swing, the shield will do minor damage to the enemy, but render you defenseless for a second or two. It can be a neat finishing blow, but it's at best situational when used in that context.