Item condition refers to the status of your gear. It could be: Perfect, Good, Fair, Bad or Destroyed. Once the item is Destroyed, a large red cross will appear over the item. You will no longer receive bonuses for that item, and will have to repair it by clicking on the hammer icon in the upper right hand corner of the armour tab.

The other status indicators are just there to let you know how soon your item will be destroyed!

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