The TC itself marks what kind of item can be dropped, the TC number will group a more specific list of items that belong in that group. Every single item in the game will have a TC assigned to it, along with a TC number that can be compared to tiers.

It exists solely to help the game organize its inner functions.

Treasure Class, also known as TC, is another attribute within the game mechanics that will never be refered on to players. These two factors will create the main progression of the game, letting players feel they are fighting strong demons while wielding the rarest artifacts in the Sanctuary realm. This simple concept makes the game more difficult as you play, but also offers the gear to offset the difficulty later on. Similar to the idea that you will not face the most difficult enemies when you take the first steps out of the Rogue Encampment, you will not be seeing the best weapons until late in the game. The easiest way for the game to grant gear progression is by limiting what can drop where. One could say that the game itself already knows which items can drop where and by whom, the rest is left down to what the player actually does and the when it comes to deciding what will drop specifically. One thing about this sytem is that it never alters the way it works unless Blizzard were to change it. While the basics of Treasure Class makes sense, it can be difficult to completely grasp the finer details of it. This is the system that Diablo uses to internally predetermine which monster can drop what item.

Shako diablo 2 tc