Timber is actually 3 different moves in one, as the Japanese name implies:
A Villager can interact with another Villager's sapling and tree, provided they are on the correct move stage—any Villager's watering can is able to make another Villager's sapling grow to the tree form, and a Villager can also chop down a tree that isn't theirs, turning the tree into their own attack. Each player can only have one sapling on the field at any given time, however, though saplings can be planted right onto another sapling.
The woodchip is part of Villager's zero-death infinite combo, due to having low knockback which can cause jab resets. Immediately after the woodchip hits an opponent, Villager footstools them, then catches the woodchip again and throws it back down onto the opponent, footstools again, and continues the cycle.
Special Move customization was added in Super Smash Bros. 4. These are the variations:
In the Animal Crossing series, the player can buy tree saplings and plant them in the ground after digging a hole with a shovel. If there are no trees or other obstructions nearby, it will grow in a matter of three days. Watering cans are only used for nurturing flowers, and do not make trees grow faster. The player can also purchase an axe to cut down trees. Standard axes and Silver Axes take damage with each hit and eventually break, while the Golden Axe is indestructible. All trees take three swings to fell. After this, the player must use a shovel to get rid of the stump.
Watering cans, axes, and saplings can be purchased from Tom Nook's store in older games, and in the Gardening Store in Animal Crossing: New Leaf.
The fruits that appear from Timber references the five native fruits in Animal Crossing: New Leaf. Every new town that is created will start off with one native fruit that can be harvested from trees as a source of income, occasionally producing a Perfect Fruit that can sell for more Bells. The other four fruits can then be obtained during certain events or by visiting other towns, which can be grown into fruit trees and sold for more value than the starting fruit.