I will try to explain what's crafting and all about crafting in a easy way to understand. 

Item Creation Importance :

Item Creation it's a living skill that is featured in PDO. It's essentially the process of collecting materials and then craft them into an equipment ( boots, helmet, armor, gauntlets/bracelets, necklace, ring, weapon) that can be precious, unique, and more importantly, powerful. 
Without an good understanding of it, your character will not advance very far. ( at some point ) 

Materials Importance :

To quite understand Item Creation you must understand the materials u will find everywhere in PDO.
The materials can be picked from Mobs ( animals or rare beasts ) drops that u kill and then collect the ones u want. 
Each kind of Mobs provides all kinf of materials, as Weapon Materials, Defense Materials, Ornaments Materials as well as Meat ( ment to medicine, is that it? ). 
The various materials are distinct from all others and used in different things.

Simple Example » a Deer Hoof has an different use than Deer Skin

Other Example »  there are some Materials that in each Mob are different, like the Trenchon, that in most of times it's an Ornament Material, like from Tigermans, but from Gorging Rampagers are a Defense Material

Most of Materials have no attributes beyond their elemental types, like AP+ against Wood, for example, yet there are a few exceptions. Those exceptions , those Rare Materials may possess various random attributes and when u craft them in your booth or in other person booth those attributes can be applied to the finished items.

About the level of the Materialshere are 3 kinds : white, blue and green. White ones are normal ones, Blue ones are quite good, Green ones are Excellent. U can see the difference between them while hunting ( i don't have any screenshot to example it right now ) 

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As SummerSnow explain and all others, this level of the Materials will be very important for the final equipment !

Note : The Refining isn't yet available, right ?  

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How many Materials u need to create the equipments u need to your character :

6 Weapon Materials » Weapon

4 Defense Materials » Helmet

5 Defense Material » Armor

3 Defense Material » Boots

3 Defense Material » Gauntlets/Bracelets

4 Ornament Materials » Necklace

4 Ornament Materials » Ring

Armorcrafting = Armor + Boots
Lethercrafting = Helmet + Gauntlets/Bracelets
Jewelcrafting = Rings + Necklaces
Weaponsmithing = Weapons

Note:
1. The formula for medicine is not available yet!  
2. The process to do all equipments it's the same to every class ( Paladin, Wizard, Priest, Assassin )

Position Formula on Crafting :

As it looks like, is there a formula ( that many people think that are one of the most important things in crafting ) , but still a doubt about that particulary formula, so i will not post anything about it .

I didn't understand quite well about that formula thing, but i will not rest until i 100 % understand it, i know that has something to do with Major Materials and Generated Materials, and i will not copy paste what Summer Snow said   __ so check in his first reply 

What i understand is that when one type of material occupies over half of the total material quantity, the final product will be of that type. Important thing : the dominating material must be over a half, not just equal to a half. 

Other Materials :

I called Other Materials to those materials u can use to create the sets, like collecting the Powerfull Materials or The Climatics ones!

2 simple examples where u can get some of this Materials :

U can get the Powerfull ones, for example, from Humanoid Mobs ( at Mount Aya Map, there are level 56 humanoids that can drop some, for a especific example of powerfull Metal Material )

U can get Climatics ones, for example as a reward of Team Quest ( u can choose the element )  

To finish good Hunting, and good crafting.