Blue,Purple and Gold?

I got an answer earlier about something, and the person mentions about loot being dropped and they would be either Blue,Purple or Gold.what the heckk was he talking about?lol, sorry if i sound like a wetbrain.

1. Blue=semi rare, but very common later.
2. Purple= Rare, but slightly more common later.
3. Yellow= Very Rare, still rare later.

They are generally good items that have good resale. Sometimes they are completely useless.

all of those are rarer then the shite drops.
Blue = there is something special (ie. Fire damage, +hp)
Purple = rare
Gold/Yellow = Ultra rare

where does it say what color it is? is it the actual color of the text or does it actually say what color it is?

It is the color of the text and the item's image. I believe that gold items are also referred to as "rare" in all drop announcements.