Item level

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Item Level defined

Q&A Hobbits to Isengard - Bullroarer
https://www.lotro.com/forums/showthread.php?539143-Hobbits-to-Isengard-Q-A-with-Sapience-notes-on-what-was-said
Q.46 - What are the item level numbers on equipment used for? Is it a future development thing?
Quick Answer: Items - like characters - have levels. A level 10 character can use class allowed equipment items of level 10 or less: but the same character will first need to level up to use (for example) a level 20 item. This is the general rule: but there are exceptions (see below).
More Detail: – The item level gives them a way of differentiating the potency of an item when compared with another item. For example if you are level 85 and can wield an item that is in the low hundreds, there may be many items in that range that you can wield. This gives you another way to compare them to decide which will be better for you. Item level tells you how much juice the devs put into a particular item. It’s not a future development thing so much as just another way of differentiating items. As part of getting difficulty level on track they need a broader variety of items available than simple equip level and rarity could provide.