To craft the Terra Blade you need three swords, the True Excalibur, a Broken Hero Sword and the True Night's Edge.
To craft the True Excalibur you need an Excalibur (12 Hallowed Bars at a Mythril/Orichalcum Anvil) and 24 Chlorophyte Bars.
A Broken Hero Sword is a 25% chance drop from Mothrons, which spawn during Solar Eclipses. You can start a Solar Eclipse with a Solar Tablet found in the Jungle Temple.
The True Excalibur can be crafted with 20 Souls of Sight (Drop from The Twins), 20 Souls of Might (Drop from The Destroyer), 20 Souls of Might (Drop from Skeletron Prime) and a Night's Edge.
The Night's Edge is crafted with a Muramasa (Found in Dungeon Chests), Volcano (Crafted with 20 Hellstone Bars), The Blade of Grass (Crafted with 12 Stingers, 15 Jungle Spores and 3 Vines) and either The Light's Bane or The Blood Butcherer (crafted with 10 of your world evil bars (Demonite/Crimtane)).