You can find toys in hippo-shaped treasures hidden on the Toys Island.
Tap the blue box icon in the bottom right corner. This mode will make all big objects invisible, and you'll see what you need to cut to unlock a new area. Then you can switch it back. Check out the screenshot attached.

Also, visit the Bungalow of Fun and Teahouse on the Toys island. There you will be able to exchange and make more Toys.