The building blocks of... stuff.
Weapons, armor, and clothing are made of different materials. The properties and appearance of an item are controlled by the materials it is made out of.
- Cloth - many colors available.
- Leather - Slightly tougher and more protective than cloth.
- Chain Mail - Pretty good armor.
- Particle Board
A single item can be made up of up to 4 different materials. The different parts of the item control different aspects of its function. For instance, a crossbow is made of 3 different materials - one for the bow, one for the stock, and one for the mechanism. The material of the bow controls how far the weapon will shoot, The material of the stock controls the accuracy and the material of the mechanism controls the reliability.
In a future update I will put a list of what each material will do for each part of each weapon. In the mean time, a little common sense should get you started (ie lead is not a good thing to make a bow out of).