Mods

A mod, or modification, refers to hacks or customizations created by the general public for commercial software, usually games. They can add to or alter a game's graphics or functions, sometimes so much that the game looks entirely new. Mods are not however standalone software, and always require the original release in order to run. They can include new items, characters, levels, story lines, music, etc, and can be built for single- or multi-player.

Mod safety
Before installing any mods, not that they are not actually a part of Terraria, in that they are not released officially by the Terraria development team. You should back up any game saves, worlds and character files (basically your entire My Games/Terraria folder) prior to trying a mod installation. Backing up your game installation (Program Files/steam/SteamApps/common, or whichever path you installed Terraria to) is also good idea.

You must never try to install a mod unless it has been updated to exactly match the version of Terraria you are running. Mods are typically updated on an irregular schedule shortly after the game itself is updated (though this depends on how quickly the mod author or maintainer gets to it), so there will always be a period following a new release when no mods are safe to use yet.

Multiple mods can conflict with each other.

Modding tools

 * Game Launcher is a tool that can make Terraria mod use easier.
 * tAPI is a current standard tool for creating Terraria mods. It was built on the discontinued tConfig.

Mod lists

 * Mods at the official Terraria Forum