Chazal says that when Adar comes one should increase in simcha,what does this mean exactly? Is there anything specific one can do? Chazal are usually specific in how to fulfill a mitzvah but I feel this Chazal is very vague? Aren’t we suppose to serve Hashem with joy everyday?
It is interesting that Chazal do not define actions that a person should do to augment simcha in the month of Adar. Chazal do mention that it is a positive time to arrange one’s dinei torah, but do not mention how simcha should be reached.
The general understanding of simcha in Adar is a spiritual/emotional state, rather than actually doing physical deeds that induce joy. We therefore fine no instruction to drink, or to feast and be merry, in days of Adar more than during the rest of the year. As you correctly note, one ought to serve Hashem with joy throughout the year (see Rema, at the end of Orach Chaim), yet it would appear that one should be more conscious of this joy in the month of Adar, deriving joy from the everyday things that one does (divrei reshus), and focussing on the special joy of the build-up to Purim.
Rabbi Chaim Shmuelevitz (Rosh Yeshiva of Mir) used to speak of dedicating extra hours to learn Torah (and used to do so himself), thereby “adding joy” to the month!
Sources: See Nimmukei Orach Chaim 686.