By custom items I mean the customized items NPC can give to you. E.g. if an NPC gives you a green blouse, even though there is no green blouse item in the game's database, it'll take a linen shirt as the closest matching item and rename it. These items now get a little flavor text that'll contain some lore or additional visual description. NPCs can also see these descriptions when relevant.
Having fully custom items built from scratch is something I've tried before, but it doesn't work too well with Nemo.