In the demo you were not really able to use the terrain tool. Well, not to its full extend. People kept asking us what they could do and how mighty the tool actually is. The answer is rather simple: It is quite powerful. We usually answered the questions with saying that in theory flying islands would be a thing. To be honest: We didn't test that out, we just knew that in theory they'd be possible.
We've tried it now. Everything you see was created by using the ingame tools only.