Compounding forms a word out of two or more root morphemes. The words are called compounds or compound words.
In Linguistics, compounds can be either native or borrowed.
Native English roots are typically free morphemes, so that means native compounds are made out of independent words that can occur by themselves. Examples:
mailman (composed of free root mail and free root man)
fireplug (a regional word for 'fire hydrant')
In Greek and Latin, in contrast to English, roots do not typically stand alone. So compounds are composed of bound roots. Compounds formed in English from borrowed Latin and Greek morphemes preserve this characteristic. Examples include photograph, iatrogenic, and many thousands of other classical words.
Note that compounds are written in various ways in English: with a space between the elements; with a hyphen between the elements; or simply with the two roots run together with no separation. The way the word is written does not affect its status as a compound. Over time, the convention for writing compounds can change, usually in the direction from separate words (e.g. clock work), to hyphenated words (clock-work), to one word with no break (clockwork). If you read older literature you might see some compound words that are now written as one word appearing with unfamiliar spaces or hyphens between the components.
Another thing to note about compounds is that they can combine words of different parts of speech. The list above shows mostly noun-noun compounds, which is probably the most common part of speech combination, but there are others, such as adjective-noun (dry run, blackbird, hard drive), verb-noun (pick-pocket, cut-purse, lick-spittle) and even verb-particle (where 'particle' means a word basically designating spatial expression that functions to complete a literal or metaphorical path), as in run-through, hold-over. Sometimes these compounds are different in the part of speech of the whole compound vs. the part of speech of its components. Note that the last two are actually nouns, despite their components.
Some compounds have more than two component words. These are formed by successively combining words into compounds, e.g. pick-up truck, formed from pick-up and truck, where the first component, pick-up is itself a compound formed from pick and up. Other examples are ice-cream cone, no-fault insurance and even more complex compounds like top-rack dishwasher safe.
There are a number of subtypes of compounds that do not have to do with part of speech, but rather the sound characteristics of the words. These subtypes are not mutually exclusive.
Rhyming compounds (subtype of compounds)
These words are compounded from two rhyming words. Examples:
There are words that are formally very similar to rhyming compounds, but are not quite compounds in English because the second element is not really a word--it is just a nonsense item added to a root word to form a rhyme. Examples:
This formation process is associated in English with child talk (and talk addressed to children), technically called hypochoristic language. Examples:
Another word type that looks a bit like rhyming compounds comprises words that are formed of two elements that almost match, but differ in their vowels. Again, the second element is typically a nonsense form:
Derivation Deriviation is the creation of words by modification of a root without the addition of other roots. Often the effect is a change in part of speech.
Affixation (Subtype of Derivation)
The most common type of derivation is the addition of one or more affixes to a root, as in the word derivation itself. This process is called affixation, a term which covers both prefixation and suffixation.
Blending is one of the most beloved of word formation processes in English. It is especially creative in that speakers take two words and merge them based not on morpheme structure but on sound structure. The resulting words are called blends.
Usually in word formation we combine roots or affixes along their edges: one morpheme comes to an end before the next one starts. For example, we form derivation out of the sequence of morphemes de+riv+at(e)+ion. One morpheme follows the next and each one has identifiable boundaries. The morphemes do not overlap.
But in blending, part of one word is stitched onto another word, without any regard for where one morpheme ends and another begins. For example, the word swooshtika 'Nike swoosh as a logo symbolizing corporate power and hegemony' was formed from swoosh and swastika. The swoosh part remains whole and recognizable in the blend, but the tika part is not a morpheme, either in the word swastika or in the blend. The blend is a perfect merger of form, and also of content. The meaning contains an implicit analogy between the swastika and the swoosh, and thus conceptually blends them into one new kind of thing having properties of both, but also combined properties of neither source. Other examples include glitterati (blending glitter and literati) 'Hollywood social set', mockumentary (mock and documentary) 'spoof documentary'.
The earliest blends in English only go back to the 19th century, with wordplay coinages by Lewis Carroll in Jabberwocky. For example, he introduced to the language slithy, formed from lithe and slimy) and galumph, (from gallop and triumph Interestingly galumph has survived as a word in English, but it now seems to mean 'walk in a stomping, ungainly way'.
Some blends that have been around for quite a while include brunch (breakfast and lunch), motel (motor hotel), electrocute (electric and execute), smog (smoke and fog) and cheeseburger (cheese and hamburger). These go back to the first half of the twentieth century. Others, such as stagflation (stagnation and inflation), spork (spoon and fork), and carjacking (car and hijacking) arose since the 1970s.
Here are some more recent blends I have run across:
mocktail (mock and cocktail) 'cocktail with no alcohol'
splog (spam and blog) 'fake blog designed to attract hits and raise Google-ranking'
Britpoperati (Britpop and literati) 'those knowledgable about current British pop music'
Clipping Clipping is a type of abbreviation of a word in which one part is 'clipped' off the rest, and the remaining word now means essentially the same thing as what the whole word means or meant. For example, the word rifle is a fairly modern clipping of an earlier compound rifle gun, meaning a gun with a rifled barrel. (Rifled means having a spiral groove causing the bullet to spin, and thus making it more accurate.) Another clipping is burger, formed by clipping off the beginning of the word hamburger. (This clipping could only come about once hamburg+er was reanalyzed as ham+burger.)
Acronyms are formed by taking the initial letters of a phrase and making a word out of it. The classical acronym is also pronounced as a word. Scuba was formed from self-contained underwater breathing apparatus.
Occasionally, not just letters but a whole or part syllable can be
used in the formation of an acronym. Examples:
radar - RAdio Detection And Ranging
gestapo - GEheime STAatsPOlizei, German for 'Secret National Police'.
These can be thought of as a special case of acronyms.
Another special case is one in which the initial letters form the acronym, but they are still pronounced as letters rather than according to the rules of English spelling. Many organization names of of this type. Examples:
Memos, email, and text messaging are modes of communication that give rise to both clippings and acronyms, since these word formation methods are designed to abbreviate. Some acronyms:
NB - Nota bene, literally 'note well'. Used by scholars making notes
on texts. (A large number of other scholarly acronyms from Latin are
used, probably most invented in the medieval period or Renaissance,
not originally in Latin)
BRB - be right back (from 1980s, 90s)
FYI - for your information (from mid 20th century)
LOL - laughing out loud (early 21st century) - now pronounced either /lol/ or /el o el/; has spawned compounds like Lolcats).
ROFL - rolling on the floor laughing
ROFLMAO - rolling on the floor laughing my ass off
In novel creation, a speaker or writer forms a word without starting from other morphemes. It is as if the word if formed out of 'whole cloth', without reusing any parts.
Some examples of now-conventionalized words that were novel creations include blimp, googol (the mathematical term), bling, and possibly slang, which emerged in the last 200 years with no obvious etymology. Some novel creations seem to display 'sound symbolism', in which a word's phonological form suggests its meaning in some way. For example, the sound of the word bling seems to evoke heavy jewelry making noise. Another novel creation whose sound seems to relate to its meaning is badonkadonk, 'female rear end', a reduplicated word which can remind English speakers of the repetitive movement of the rear end while walking.
Sometimes words are formed by simply changing the spelling of a word that the speaker wants to relate to the new word. Product names often involve creative respelling, such as Mr. Kleen.