There are several different types of machine component, all available from the Machine Components screen in the uild menu. These components can be used to create complex machines. In order for the machines to operate, you must have a power source (either wind or water) of some kind. Power can be transfered to machine parts which require it by a system of axles and gear assemblies. Some machines, screw pumps for instance, can be powered by hand or hooked up to a lever.
Machine components have two basic states in which they can be built: solid base or hanging. Solid Base is just what it sounds like; the machine component has been built on solid ground, and so it has a solid base on which to rest. A hanging component is not built on solid ground, and so must be built beside an existing machine or component. Its only support comes from the adjacent component. This can be daisy-chained, so that it is possible to build machines which have only one component on solid ground, with the rest hanging out into empty space.
Possible advantages to this include protection from destruction by invading enemies (If they can't get to the machine components, they can't destroy them). However, it can be risky, as the rest of the parts will likely collapse if the component on solid ground is destroyed.
Levers can be hooked up to a machine component, causing it to "disconnect" when the lever is pulled. If a component is disconnected in this way, and is serving as the support for other machine components, those hanging components will be exploded into their basic components, as they will no longer have support.