Quality

The quality of an item in the world of Terraria is determined by the color of its name. There are currently eight tiers of item quality.

Tier -1:
Tier 0 or Tier -1 items that have labels such as "Weak" after being crafted will become grey.

Tier 0:
Most items in the game that are craftable will end up being White named. This Copper Helmet is an example of a Tier 0 (White). With the exceptions of Obsidian, Fireblossom, Fireblossom Seeds and Hellstone, items of this tier are destroyed upon contact with lava that is deep enough to cover approximately 25% of the item.

Tier 1:
Weapons and Armor made of Demonite or better are tier one. Certain accessories such as Lucky Horseshoes are also tier one. Certain uncraftable weapons are tier 1 such as the Ball O' Hurt. On the 1.0.5 patch changelog, the developer "Tiy" confirmed that this is the Blue Tier.

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

Tier 3: (sometimes called )
Weapons and armor made of Hellstone are tier 3. Certain uncraftable weapons are tier 3, such as the Staff of Regrowth. These items are generally rare and high end items, except for the Staff of Regrowth, which generally is only used for cosmetic purposes. Rocket Boots, Feral Claws, and Flower of Fire are tier 3. These items are rare and usually found later in the game.

Tier 4:
Most items made of cobalt, mithril, or adamantite bars in the 1.1 update are naturally Tier 4.

Tier 5: (sometimes called )
When a Tier 4 Item is crafted with labels such as "Violent" or "Godly".

Tier 6:
This quality is on late game items such as anything in the Hallowed Set, and some items with top-tier effects, such as "Godly" and "Legendary". This does not apply to all top-tier forged items.