Terraforming is a generic term for the ability of races across the galaxy to transform a planet into something better, something they wish. Though technically, environmentally the planets could increase in danger, this has no detrimental effect on the production on the planet, the goal of terraforming being to increase resource production. As such, not only Terra Planets can be created (in actually, terra planets cannot be created, only their distant cousins, Oceanic Planets and Gaia Planets), but Irradiated Planets or even Demon Planets. This has no negative effect on population and a positive effect on resource production.
The terraforming devices are very rare, usually being Non-renewable resources, thus their use should be done wisely.
See also Maximizing Planets.