This steam engine was most probably made in the 1890's, by a German company called "K.M. & Co." Toys like these were capable of driving minature presses and other power-driven tools, the most common being miniature woodshop devices like table-saws, grinders, and drill-presses.

A small spirit-lamp sits at the bottom of the engine, and heats water that's been put in the upper chamber. Steam power turns the wheel on the right, which in turn runs other devices through a series of belts. This engine is missing a pressure release gauge just to the right of the chimney.

Update: a kind visitor named John had the following information to add:

The manufacturer is Krauss Mohr, a small company that conducted business in Nuremburg, Germany. The label tends to date this model to around 1900, give or take a few years.