In Tom Clancy's The Division, items are split into several categories of rarity and item types.
In general, Rarity indicates how rare a particular weapon, gear, or mod is. Usually the more rare an item is, it is guaranteed to have better stats and extra boosts.
There are 7 different item rarities each distinguishable by the color of the item icon background in The Division, which you can find in the game. The loot ranking is as follows (with Exotic being the highest):
|Rarity Level||Sound When Obtaining|
Vanity items are unique items that can be acquired from fallen enemies, loot caches, and helping wandering citizens. Vanity items can be one of many things, such as clothing for the player's character or weapon and backpack skins. Unlike the aforementioned rarity items, Vanity items are solely cosmetic, and only serve the purpose of changing the character’s appearance.
Exotic items are specifically named weapons and gear items that are only obtainable from Mission Drops, Exotic Vendors, and Exotic Caches. Exotic items have a unique looks and weapon talents, making them different than other weapons and gear pieces.