Items are fairly self-explanatory and are divided into different groups depending on their function, such as Equipment, Battle Items, Field Items, Craft Materials, Quest Items, Home Items, etc.
Items can have Weight, if you are over the Weight limit, you move slower and you may receive a penalty to your Momentum in battle. Craft Materials and Quest Items are Weightless, otherwise each Item will give you 1 Weight (except for stackable items which only give you 1 Weight for the entire stack.)
Items can be obtained in a variety of ways, either you can purchase them from shops for murai (or other currency), find them in chests in dungeons, find them rarely from slain monsters (or always from a mini-boss monster), opening up a Spatial Core, receive them from completing quests or Laplace requests or craft them using various Craft Materials.
Equipment are items used to passively enhance your abilities in combat. Characters have 6 Equipment Slots, ranging in order from a Weapon Slot, an Armor Slot, an Off-Hand Slot (this can be a Glove, Shield or another Weapon), a Footwear Slot and two Accessory Slots.
Battle Items are ones that are equipped to the Item Belt to be used during battle. This covers things like Potions which restore HP, FP or remove Status Ailments and Reusable Battle Items such as the Jammer Pacifier or the Staff of Miracles.
Field Items refer to items that are used outside of battle. This involves things such as Alga Plumes, Books, Food, some Donation Items and the like.
Craft Materials are ingredients used in crafting Items. This ranges from Catalysts which are used in Enchanting, Cooking Ingredients used to make Food, Alchemy Ingredients for Alchemy and Wood, Cloth, Ore and Miscellaneous Items which are normally used in crafting Weapons and Armor in Metalworking, Woodworking and Tailoring respectively.
Quest Items refer to items used in or rewards for finishing Quests or cover undroppable items in general. (Such as Arena Badges.)
Home Items are ones that are intended to be placed in Houses. (Chairs, Tables, Paintings, etc.)