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In addition to investing skill points in mastery trees, characters can also be developed by acquiring better armor and weapons. If you've played WoW, the items are color-coded according to power. Also like WoW and Diablo, relics can be socketed into items to improve the bonuses they give. If mistakes are made, they can also be unslotted.
If you have the expansion, there are also powerful items called Artifacts. These need to be crafted by acquiring the relevant items and it can be time consuming. They can provide powerful passive buffs to statistics and also give other abilities. They are also a way of spending the gold you accumulate, as they're costly.
Relics can be combined with others of the same type (like three or so times) to create a more powerful relic. Once they're at their maximum level, an extra bonus is gained. Also, don't use relics on items you know you'll be getting rid of soon, because it's a waste. Relics found in a higher difficulty will also be more powerful than ones found in a lower difficulty. This also extends to normal items.
Lastly on items, enemies drop what they have on them. So if an enemy is dealing unusually high damage to you, the chances are good they'll drop a powerful weapon when they're defeated. You can also tell which enemies might have a good weapon on them by looking at the weapon's graphic they're holding. So always make sure you defeat enemies that may hold powerful items before turning the game off. Enemies are randomised each time the game is started up and the world is repopulated, including areas you've already cleared. This also extends to bosses. This is different than the loot system in other games, as an enemies' statistics are normally static and you won't have an idea what item you'll get until they die.