From Diablo Wiki
Itemization is the process of creating items, applying appropriate modifiers to them, getting their damage ranges balanced, and so forth. It's one of the most important aspects of a game like Diablo III, but is one of the last ones the team works on, since so many other features need to be in place before the final weapon and armor balancing can come into place.
Jay Wilson and other developers have spoken about the itemization process a few times during the game's development.
August 2009: 
What is the development process focused on right now?
- Jay Wilson: What we’re focused on right now is production. We’re in a stage that we call a “hardcore production stage.” Most of our big scary questions have been answered. Most of the questions that are remaining are not questions that we consider to be especially hard. We just have to make these decisions at some point. For example, itemization. Itemization is not a big looming worry for us, it’s just something that has got to be done. That’s where the project is at. We’ve got a whole bunch of things to do and everything seems like it is on a very good track, but it’s just a lot of content to make.
- ...So, player economy and itemization are two of the last things you do. Mostly because nothing waits for them, but they wait for everything. Until you have vendors in working the way you want, until you have a lot of progression through your game, all your support systems and different items that you find - until you have all of those things - there’s really not a lot of go hpoint to doing any in-depth economy or item math. Most of the items that we’ve done so far are so there are actually items in the game. So, that being said, the key to doing a good economy is pulling out money at roughly the same rate that you’re putting it in. I say roughly because a little bit of inflation is okay, but deflation is generally bad.
October 2009: 
- Diii.net: Are we going to see returning set or unique items from Diablo 1 or Diablo 2?
- Jay Wilson: *pause* Uh... probably. The game’s itemization is done fairly late in development. The itemization in general is done fairly late in development. So at that point we’ll be building unique items and looking all over the world for ideas and I’m sure we’ll look at the previous games.