To combine, [[activate]] the first item then right-click the second (identical) item and select "Combine".
An entire [[Pile of items|pile]] of identical items can also be combined at once. Activate the second (or later) item in a pile, right-click the pile group line (the one with a -/+ sign), and select combine. This will combine the selected item with the others into one item with the combined weight and the average [[quality]] (QL) of the combined items.
Note: Combining will reduce the total monetary value of the final product if they are not all of the same QL. Combining uses a [[Wikipedia:average|linear average]] but the prices in Wurm are not linear but, instead, quadratic (so a [[Wikipedia:quadratic form|quadratic sum]] would be more accurate than a linear average).