I would like to make a 10' x 16' shed using concrete blocks for the base. Should I put sand or cement under the blocks?
Get Local Building Dept. approval, they'll direct you on this as well. But, 4" of tamped sand only works if it's retained, it washes away. Tamped 3/4" jagged gravel at 4" deep is the best choice. The bigger issue is tying the building down from wind loft. This is where a concrete filled cinderblock & poured concrete foundation may be required. Don't mess with the Town, they'll fine you $1000's & also make you tear it down regardless of how right it's built.
I agree with Iggy,having put up a shed myself. Foundations are of particular importance to building authorities, especially if you are in a high wind geographical location. At a minimum,I'd be digging trenches the perimeter of your shed, pour concrete as a foundation to lay a couple of courses of your concrete blocks The blocks should be of the type that have holes through the centers. Once laid, use threaded steel rods,running through the blocks vertically and fill all blocks with concrete. This will provide anchoring points(threaded rods) to tie down your shed. The area within the perimeter could then be filled with a good base material,compacted well, even mix some of your dry cement with it. This will form a good base if you decide to lay concrete later. Above all,consult your authorizing body before commencing anything.