Steel can be shaped and polished using basic tools. Steel tools are tempered to be hard enough to keep a sharp edge without dulling, but not so hard that they become brittle and can shatter.
This temper will be destroyed if the steel overheats, so it is important to avoid getting the steel too hot when shaping it. If the steel changes color, it is too hot.
If you can hold the steel in your hand, it is safe to work with. Using hand tools or tools like a micromotor or flex shaft should not overheat the steel, as long as you keep moving the file rather than staying in one spot.
When using larger power tools such as a bench grinder or angle grinder, you will need to quench the steel regularly to prevent overheating.