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If you do some simple research on this, you will find great explanations with examples. To summarize, however, there are many processes by which words come into a language.
Aggulutination – forming new words by adding affixes (prefixes and suffixes) to them, i.e. “use” + “less” + “ness” = “uselessness”
Acronyms – forming words from initials of words in a phrase such as RADAR: Radio Detection and Ranging and LASER: Light Amplification by the Stimulated Emission of Radiation
Borrowing – just what it sounds like, borrowing from another language. English has borrowed words from all sorts of languages – Latin, German, romance languages, etc. Sometimes this is the same as "loan words" (see below).
Back-formation – removing prefixes and suffixes from existing words, such as forming “edit” from “editor”
Blending – forming a word by joining parts of two or more other words such as “smog” (smoke = fog)
Clipping – making a word from part of another word, such as “ad” from “advertisement” or “auto” from “automobile” etc.
Calque (one of my favorites) – borrowing a word or phrase from another language that is a word-for-word translation. Examples are “flea market” from the French "marché aux puces" (“market of the fleas”) or “by heart” from French “par coeur” or “honeymoon” from French “lune de miel (moon of honey).
Compounding – Combining two different words into one – tons of examples of this: airplane, grandfather, butterfly, outgoing, etc.
Conversion – Using the same word as different parts of speech, such as “rain” as a noun and a verb or “snow” as a noun and a verb
Neologism (here is a compound word for you!) – it literally means “new wordism” but this process is that of making up totally new words, such as xray, google, blog, kleenex, etc.
Loan words – borrowing words or phrases from other languages: déjà vue, cliché, cul-de-sac, etc.
Onomatopoeia – words that imitate sounds: buzz, jingle, zip, tweet, cukoo, etc.
There are others, but these are the main ones.
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