It’s not just German. Many Germanic languages combine words to make longer ones. Swedish does it as well for instance. But it’s not like there is a unique word for everything. It’s just several words written without spaces to form a word. For example, smörgåsbord is smörgås (sandwich) and bord (table) mashed together. Smör means butter and gås means goose. So the literal translation would be buttergoosetable.