Sally Lloyd-Jones has done a marvelous job of describing why God created the world and all of us in it in her recent children’s book Thoughts to Make Your Heart Sing (Zonderkidz, 2012), pages 52–53:
God tells us to glorify him. “Glorify” means “to make a big deal of.” When someone makes a big deal of you, it fills up your heart with joy.
But why does God need us to make a big deal of him? Why does he need us to get joy?
He doesn’t. In the beginning God the Father and Jesus, his Son, together with the Holy Spirit, were already there — a loving family, glorifying each other in this wonderful Dance of Joy.
No. God didn’t create us so he could get joy — he already had it.
He created us so he could share it.
He knows it’s the thing your heart most needs to be happy. When God says, “Glorify me!”, he’s really saying, “Be filled with Joy!”
He’s inviting us into his Forever Happiness.