Aground

An evolution gem can be crafted within an Evolution Chamber, which is found on the island to the east of your starting island. This is the 'Magic' and dragon route. To do so, you'll need to fight the Old One boss, which will also unlock:

Once defeated, a new entrance in the boss's room will open the UI for the Evolution Chamber. Here, you can spend 5 evolution shards or 1 of each elemental gem (5 total), along with fuel from focus gems to create the Evolution Gem.

Once you are at this point, the Alchemist will advise you to fly further east, to see more islands that can help you. The first island encountered is made of hieroglyphic tiles, as well as having an Elder Dragon to talk to. This island also will have several evolution shards hidden within it. Dig downwards, exploring to try to find what looks like a single gold nugget in certain tiles. These are the Evolution Shards, and there should be 5 present on this isle. Collect them, head back to the evolution chamber, choose your gem, then wait a minute for the process to complete. Collect your evolution gem to unlock the achievement.