Dirt is a basic block found in abundance around the map. It is the second block layer of the ground in most Biomes and has a depth of three blocks or more with a top layer usually consisting of Forest Ground, Snow or Destroyed Stone depending on the Biome.
The exceptions are the Desert & Wasteland biomes which have four layers of Desert Ground & Destroyed Stone respectively as opposed to a combination of a top layer and Dirt.
Digging up Dirt using a Shovel will yield 22 Clay Soil. This means it provides more Clay Soil than is needed to craft making it a renewable source. The gain can be increased by putting skill points into the Mother Lode perk.
Dirt can be repaired using up to 14 Clay Soil, but cannot be melted in a Forge nor scrapped.
Dirt is no longer used for Farming and thus has little use these days. It can still be used decoratively or to patch holes in the ground. The Top Soil Block has the same functionality but additionally takes on the texture of the related Biome.