Rune Factory 4: See other's Blogs and secrets
Once you've acquired a forge and/or a crafting table, you can begin upgrading your weapons via forge and armor via crafting table. The forge can upgrade weapons and farm tools, and the crafting table can upgrade all types of armor.
When using the forge or crafting table, you will have the option to upgrade. Choosing said option will bring up a crafting menu with three slots. The top slot is where one places items used to upgrade, the middle slot is where to place the item you wish to upgrade, and the bottom slot shows you the outcome of combining the two items in the middle and top slots.
Each item that is usable to upgrade armor and weapons will have a classification in it's description labeled "[Upgrade Info]" which will tell you the difficulty level to use this item to upgrade with and the effect that using this item will give to the weapon or armor once upgraded. The difficulty level corresponds to your crafting/forging level and the RP needed to use higher difficulty items lowers as your forging/crafting levels increase.
Every time you upgrade an item it will go up one level, even if no additional stats are added. Every item has a maximum upgrade-able level of 10, so make sure to make your upgrades count, as you cannot upgrade beyond this point. As well, the more you try to upgrade the same item to the piece, the lower the effect will be, up to the point of having no effect at all.
A helpful tip: by adding upgrade items to the initial recipe of an item (Note: you must make the item from a recipe for this to work!), you can craft much more powerful versions of the weapon/armor with a blue colored name that have the upgrade effect applied to them at level one, thus allowing you to make significantly more powerful items as you will still be allowed to continue to upgrade these items to level 10. On top of this, if you use a recipe that is low difficulty, it is possible to add very high difficulty upgrades to the items for much, much lower RP costs than if you were to do so during normal upgrading, to the point where you can use upgrade materials you wouldn't normally be able to use. This is directly tied to the difficulty of the recipe itself: adding upgrade items during crafting requires more RP, stacking on top of the base amount of RP necessary. Although crafting additional pieces to a base item does not affect the diminishing returns, only the first three items will augment to the weapon or armor.
Additionally, using the same items to upgrade a single piece of equipment will cause succeeding items to halve after each use. 10-fold Steel, however will be rendered completely useless after its first use.