Having looked at what a ledger is, and why the concept of a ledger is significant within blockchain, it's time to move up a layer and consider "ledgers within ledgers".  When a smart contract instantiates a fungible or non-fungible token, what it is doing is implementing another ledger in order to keep track of the balance or ownership of the token.  So - tokens are created by building legders within ledgers.  This video goes into what that means at greater depth.