Click a tool, then click a gnome. Blocker stops others. "Dig ↓" (digger) tunnels straight down. "Dig →" (miner) tunnels horizontally through rock in the direction the gnome is facing. Builder lays a staircase up. Parachute lets one gnome float down safely from any height.
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Level 1 — how it works
Your gnomes walk on their own. Pick the builder and click a gnome: he lays a staircase upwards. Build one staircase to the ledge on the right so the gnomes reach the safe exit.