Morphology

Morphology is the branch of linguistics which studies the structure of words and types of their formation. It is generally divided into inflectional morphology (which studies inflections of a language) and derivational morphology (which studies the types of word formation). 

Morpheme is the basic unit in morphology. It is defined as a minimal unit of meaning or grammatical function. There are morphemes that can be used as single words (e.g. book, run, nice, one). They are called free morphemes. Others cannot stand alone and have to be attached to another morpheme (e. g. un-, -ment, -ed, -s). They are bound morphemes. 

An example of a free morpheme is "bad", and an example of a bound morpheme is "ly." It is bound because although it has meaning, it cannot stand alone. It must be attached to another morpheme to produce a word.

Free morpheme: bad
Bound morpheme: -ly
Word: badly

Words which consist only of one morpheme are called simple words. Words consisting of two or more morphemes are called complex. Complex words have a root and one or more affixes (prefixes or suffixes). The form to which an affix is added is called a base (or a stem). 

Derivation is one of the major types of word formation. Another very productive type is compounding – the process of joining two or more words to form a new word.

Conversion is a type of word formation when the function of a word changes (such as a noun to a verb or vice versa), e.g. butter (N) – butter (V); walk (V) – walk (N) or open (Adj) – open (V). Other types of word formation in English include clipping, blending, borrowing, backformation, initialisms (abbreviations and acronyms), and onomatopoeia.