To unlock new paths and gain access to hidden areas, you'll need to understand how to convert each item. For example, a piece of iron transforms into a glass key when dropped in a pool of fire. This process is not random, but rather requires multiple stages if needed. If you keep good notes, you'll discover all possible transformations.
As you navigate the mazes, monsters will try to hinder your progress. Fortunately, transforming certain items into decent weapons makes short work of these obstacles.