Toys are items that you can buy at the Shop to instantly boost Joy and Love. The toy for sale changes randomly (dolls, games, etc.) and each one increases Joy by 1/30th of its price and Love by 1. After you buy a toy, your slave will thank you. After buying 4 of a particular kind of toy (dolls, teddy bears, or games), she also says that she has enough toys. Then any more toys of that kind that you buy will only increase Joy by 1 and Love by 0.5 regardless of what its description says.
The teddy bear is a special toy that is used in a game event. You need one so you can give it or not to the slave, Sareth, in the Main Slave Pens, which is associated with getting into the Ruins later. (To get into the Ruins, DON'T give it.)