When planted, saplings naturally, and eventually will grow into a tree, respectively to the type of sapling it is. This process can be sped up with bone meal. These can only be placed on grass or dirt.
The silkwood tree was originally going to generate on mycelium, as when the biome was first made, it generated near cold biomes. But MCE couldn't get the tree to generate will that block underneath it, it would still have grass, so he changed it.