In your inventory, you have 27 space including Tools and Materials . An space is ocuppied when you have an item, but you can have 1 or 7 million of it, you still occupy one space.
You can expand your space by another 27 when you buy a Chest (1500) or you can craft it for 750 of any wood.
When your space is full, you cannot do 1m/1c/1d and take/put items from chest. You can make more space by doing 1remove <item> or 1sell <item>. To take/put items out of or in the Chest use 1chest <take/put> <item> <amount/all>