It's cool phydeaux, I mentioned sockets too in one of my other threads here
And sockets are easy. Think of it this way:
Item drops - stone sword (1). The 1 represents a socket a gem could go in. gem - (Blaze Essence - +4 to fire damage). You can then break the gem to get it out of your weapon for new enchantments after its been placed. Some weapons could even have, 1-2-3 sockets, progressively rarer of course.
There should be levels of crafting, a lot like how your mentioning with NPC's but first starting off with simple upgrades such as going to a blacksmith and refining your weapon for a chance of a few more points of damage such as the +1\+2\etc and then higher levels of crafting, such as npcs, and collecting raw materials to be used in the enhancement of a weapon (frost\etc), eventually getting more complex, with maybe altars\cauldrons\etc and harder quests to access these types of things. Despite that, NPC's will probably be the most important thing when it comes to crafting. Which gives me an idea...
What you can craft should be partly based on your decisions, like how your able to obtain different items by siding with different people; so if you worship the shadow, there could be the cult in nor city that will allow you further access into the recesses of their temple so that you may grow closer to the shadow and grow more powerful in that aspect??
But then again... there is always Kazaul and Elythara to worship as well
Same thing with possibly things such as the thieves' guild\feygard. They could provide different NPCs that would let you place different bonuses on your items.
It should also be done in stages... what I mean by this is that crafting a weapon should be separate from crafting a platebody\boots, or jewelery. That way everything cant be just done at one place and it gives you more things to unlock.
Having to create the blank weapon yourself would help IMO because once again, gold seems to be really easy to get in this game
unless base weapons were very expensive\crafted items aren't very powerful. An important thing to keep in mind when suggesting stuff like this is that people grind a lot in this game. Some more than others. This game is pretty much set up for grinding. So you have to make things difficult to obtain
It could start off as easy as a stone sword, then work its way up to harder to obtain materials. Depending on how tough you want to make crafting, you could begin with a progression like this:
Raw Materials\Ingredients\Components (combine to make) Forged\Assembled Materials (combine to make) Blank Item
The same progression can be used to finally apply the magical/natural effect of frost\shock\fire/etc/etc. Even forged\assembled materials could combined to make different ones in order to get your desired effect. Example here:
Stone (raw) + polished gem = (forged) sparkling rock + (insert forged material here) = Inferno Dust
Then, you can simply take all of your base materials and adjust their levels of potency, so like:
Minor - Lesser - Greater - Exceptional (Inferno Dust)
Of course all of this would have to be in categories... for example starting with the basic (anvil\npc) gives you the first and basic category, the +1\2\3\4 to weapon damage\attack chance\etc, possibly weak versions of the frost\fire\shock
Then you would move up to stronger versions of shock\fire\frost, no more damage\chance at this point. Adding bonuses to skills could be an idea, like a 10%\15% thing. Damage resistance is an idea. Protection on certain active conditions. These ones you might get from NPCs or something solely
Finally, there could be a third tier, where you get it from hard to find quest altars or something. This could give you new active conditions to choose from, plus it could also enhance your previous hard worked for enchantments. Of course like taledus said the possibilities are endless when you speak of simple things like new abilities and conditions.
Another thing to think about is how many of these crafted items will you be able to wear simultanously . Perhaps there should be some kind of active condition that only allows you to wear one or two. I only say this because I think dual wielding will be introduced? Perhaps.
Now not all crafting has to be in tiers. Some, can be simple, just like finding a magical item to place in your armor\gem for a ring to unlock its potential\something like that. What you get could even be random.
Now, my only qualms with this are three: Legendary\Extraordinary items, Enchanting your current equipment, and monsters.
If this is to happen, L\E's will need a new system so that they can also still have the edge they've always had in the game, in case crafting is easier than farming for one.
Second, will you still be\should you be able to enhance your old gear as well without having to craft new things?
Thirdly, if we give anything simple and new such as shock\fire\freeze to the player, monsters should definitely get some type of access to similar damage types\abilities.