Rarities
Items drop as Common, Rare, Special or Unique. Each rarity has its own colour and sets how many gear effects the item rolls; an item holds at most 4 effects.
Common
No effects.
Rare
1 rolled effect.
Special
2 rolled effects.
Unique
1 rolled effect plus the item's fixed Unique effect.
Melee weapons, ranged weapons and armor only; artifacts go up to Special.
Unique versions
Every melee weapon, ranged weapon and armor piece has a named Unique version, 116 in all. When a base item drops with the Unique rarity, it drops as its Unique version, which carries one fixed effect. The Town Merchant never sells Unique items.
Town Merchant
The Town Merchant sells Common items at first. Raising the merchant's level unlocks rare item purchases, then special item purchases.
Soul Storms and the Blacksmith
The game says: "In Soul Storms, items have a chance to drop with an extra effect!" Rare, Special and Unique items can get that extra effect; Common items cannot. The Blacksmith re-rolls effects on Rare items from its first level, on Special items from level 2 and on Unique items from level 3.