I cannot find a way to place a lantern to light up the further levels, nothing I've clicked or tried has worked and there's really no explanation
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I'll improve the tutorial for the next update, thanks for your feedback! You first need to craft a lantern from the Anvil (Craft) menu. You can use the Fireflies or Iron Ore to craft them. Once you have one, you can drag and drop it onto any illuminated space. There should be some text along the side of the Map window to help. Let me know if you need any more advice!