Loot

This term refers to the items, weapons, crafting materials, gold...literally anything "dropped" by mobs when they are slain. For this reason, loot is sometimes referred to as "drops".

The quality and quantity of loot dropped is fairly random, but is directly related to the uniqueness and difficulty of the slain mob. The higher level the mob, the more valuable/useful the loot is likely to be. The chance of dropping a rare item is greater at higher difficulty levels as well.