The word "蜗居" is formed by combining the character "蜗", which means snail, and "居", which means dwelling or residence. Here, "蜗" acts as a descriptive modifier for "居", creating a metaphorical meaning where the snail's shell symbolizes smallness and confinement, thus referring to a very cramped living space. This direct combination of characters results in a compound word that literally translates to "snail dwelling" and conveys the idea of a minimal, confined home.