Shape is used as a verb to describe the process of creating an axe from stone. The stone gradually changes shape and ends up looking like an axe.

A synonym for "shape" would be "form." You could also use a more specific verb like "transform" or "convert."

MIchael Chambers is correct, except that actually I think the process is chipping flint. Flint is a particular kind of stone. When is hit skillfully, chips break off and leave a razor-sharp edge.