A loot table is a list of probabilities for different items to drop as random loot from monsters or chests, or in other cases where the choice of item is not guaranteed. The term is an informal, conceptual way to discuss games' internal mechanics which randomly choose items for players to receive. It allows players to understand when it is or isn't possible to obtain a specific item from adventuring in different areas, and how likely they are to find it.
Loot tables can vary by specific monster or chest type, Elite Monster status, Difficulty setting, zone, Game Mode, Character Level and Class, depending on the game.
Diablo[]
The first game's loot is based on dungeon level (1-16), monster level and type (which itself is related to dungeon level), and difficulty level. Each base item type and each magical affix that can appear on it has a specific requirement to be eligible to drop.
Diablo II[]
Diablo II has a complex loot system based on labels called treasure classes. These are assigned to every Super Unique Monster, and derived for every other monster based on an area level assigned to the zone and Elite status of the monster. Each treasure class represents specific categories of item, and defines a weighting between each item in the class, or no loot. Upon killing a monster, the game looks at its treasure class(es) and generates random numbers to compare to the probabilities to see what loot might be awarded. If no item is chosen from this random check, the process is repeated for lower quality treasure classes. Items also have quality levels which must be met by the monster's level to qualify to drop.
Diablo III[]
The first version of itemization and loot in Diablo III was similar to its predecessor, with item levels defined by game area and difficulty, which affected which magic properties could appear on items.
The release of Diablo III: Reaper of Souls came with a complete overhaul of the difficulty and level system, as well as an updated item design and drop system called Loot 2.0. Item attributes are completely oriented around the character's level at the time the item dropped, with no requirement based on game zone. In this system, while some items and properties are more rare than others, there is almost no circumstance that would change the relative likelihood of which item or attribute will appear for a character once they have reached maximum level. Instead, most bonuses to item finding simply increase the overall frequency of higher quality drops.
Higher difficulty levels improve drops in this non-specific way, except that the highest gem qualities require Master difficulty, and some items are locked behind Torment difficulty. Various bosses and special chest types have increased likelihood of specific item types (like gems) or a guarantee of one or more Legendary Items. Some of the in-game special modes or areas like Adventure Mode and Nephalem Rifts automatically increase the chance for higher quality loot or the overall amount of loot.
Loot 2.0 also instituted "smart drops", a system where most items found are based on a loot table specific to the player's class. This helped ensure players could find desirable gear with the closure of the Auction Houses. Items dropping in the main game world still have a chance to be an "off-class" item, but otherwise have a type and Magic Properties fitting the current class, including bonuses to primary stats, Elemental Damage types, and specific skills.
Any kind of item crafting with Artisans or Kanai's Cube always results in class-matching items, unless this is impossible due to item type. This can make it difficult to equip a Follower that does not share a character's primary stat. In the case the type does not appear in the current class's loot table at all, the item will instead be crafted/re-rolled with stats appropriate to classes it does drop for. When a class has some but not all Legendary Items of a type in their loot table, such as Witch Doctors with the Bovine Bardiche, the "missing" item cannot be produced by Kanai's Cube. In these cases it is common to craft with a different character that matches the desired item or stats.