As stated earlier, louvers are the slats that can rotate within the shutter frame to either block or allow more light to enter through the window. The easiest way of creating these is to buy "sheets" from National Balsa. Determine what length you need the pieces to be and buy the size that is exactly right or larger.
Once the pieces arrive, your first step is to round all four edges of the piece. I wanted the edges to have a continuous rounded edge rather than an elliptical one. Each piece should be 3/8" thick... so using a 3/16" roundover bit produces this result. This Porter Cable bit is the one I bought. This is a relatively easy thing to do, but doing four sides of 26 pieces that are each 3 feet long... takes about an hour.
This is what they should look like when you are done:
Once the pieces are nicely rounded off, cut the pieces to the desired length. It looks much more professional if you can get all the pieces exactly the same length.
Now you will need to drill holes in the ends of louvers to accept the louver pins. Drill a 9/64" hole at least 5/8" deep.
I highly suggest using nylon shutter pins rather than dowels. This will allow much smoother movement. I bought 1,000 pins for about $30 from Professional Hardware.