From Wikipedia: Opium is a narcotic analgesic drug which is obtained from the unripe seed pods of the opium poppy (Papaver somniferum L. or the synonym paeoniflorum).
Raw Opium scraped from the pod is typically around 10% or less average Morphine content. It is comprised largely of plant solids, pod shavings, aphids, & other stuff which play no role in acheiving an analgesic effect.
These organic impurities can be separated away from the alkaloids using hot water. The end resultant substance is traditionally called 'cooked opium' and/or 'smoking opium', and is said to be typically 50% or so stronger in alkaloid content than was the raw opium precursor.
Laudenum aka Tinctura Thebaica was first popularized, or rather the dangers inherent in it's usage were first brought to public attention, in Thomas De Quincy's scandelous 'Confessions of an English Opium Eater' (1821), the 'Trainspotting' of it's day. In England at that stage in history opium and it's derivatives were the most commonly used form of painkiller, more readily available than aspirin and prescribed for everything from backache to infant teething trouble (!) Many respectable people thought nothing of using the substance on a frequent basis; given the private nature of the Victorian lifestyle it is impossible to judge how many individuals developed some form of dependancy ( there are obvious paralells to the prescribed tranquilizers like valium which are dispensed freely nowadays). Most people would have known opium in the form of laudenum, or paragoric (a very similar substance), a liquid preparation available from chemists which was administered orally. Tinctures of psychoactive drugs were pretty easy to come by; Queen Victoria herself was notably given tincture of cannibus to alleviate menstrual cramps.
Raw opium in any state of freshness/dryness is dissolved into a volume of hot water at approx 10 times the volume of the opium. This is heated over low heat and SIMMERED! NEVER BOILED! for 15 to 30 minutes, stirring occasionally to break up and dissolve the opium as much as possible.