Rarity

Rarity is usually considered as a measure of how difficult to obtain or how valuable an item is. The color of the item name text gauges the rarity of an item, with white being the most common and orange being the most rare. All items except white items will not burn when in contact with lava (with the exceptions of Obsidian, Fireblossom, and Fireblossom Seeds).

Tier 0 (White)
All basic items fall under this category. These are mostly building materials. Items that are white are not necessarily worthless, and could be a good source of income early on. Items from this tier will be destroyed in Lava, unlike the higher tiers.

Tier 1 (Blue)
Weapons and armor made of early game ores are tier one. Certain accessories such as Shackle and Lucky Horseshoe are also tier one. Certain uncraftable weapons are tier 1 such as the Ball O' Hurt.

Tier 2 (Green)
Tier 2 items are largely uncraftable, with the exception of Necro Armor, Sandgun, and the Star Cannon. Muramasa as well as spells like Water Bolt are tier 2.

Tier 3 (Orange)
Weapons and armor made of Hellstone or jungle releated materials are tier 3. Certain uncraftable weapons and accessories are tier 3, such as the Staff of Regrowth, Rocket Boots, Feral Claws, Flower of Fire, and the Dark Lance. These items are rare and usually found later in the game.