Make all the custom items, given them some backstory/lore bits the players can read. Place them ingame in areas/positions where they make sense.
Some of the official expansions had trouble with this, as the game includes specifically named items that when examined have no backstory, just 'item does not bear the marks of any particular maker'. Umm, it's a item given an individual name, not just dagger +1 or even a 'sword of parrying'. My guess is the dev ran out of time and dev zots before release.
The backstory of a unique item is an extra bonus to the player though. Mechanically it doesn't do anything, but it gives the player connection with the gameworld and feeds the player who is interested in lore, discovery, and exploration. It helps roleplay, the player and thus the character can become invested in the item.
In Bedine I made four custom magic items for each of the Bedine traditional gear (armor and weapons), two each of +1 and two of +2, there are two of each so a player can have some item choice at each + level. Some of them are basic +1 with a story, others have other powers in addition to their + level. But all have associate lore. For example the scimitar Tawahhaj, it's not particularly powerful, a +1 scimitar with unlimited use of the Flare spell (which is near useless in default nwn2), but here is it's description:
Tawahhaj is the name given to this scimitar, but it is really the name
of the tiny scarab wasa-ey that lives in a hole in the pommel. Tawahhaj
the scimitar itself is unremarkable other than the hole in the pommel,
Tawahhaj the wasa-ey transfers it's power to the scimitar. Tawahhaj the
wasa-ey does not speak or otherwise communicate with the person carrying
the scimitar. The wielder of the scimitar does generally offer bits of
food to Tawahhaj out of recognition of it's power, but it is not clear
if Tawahhaj eats them or not, or even needs to.
Hopefully that sounds cool. It tries to invest a simple +1 weapon with a very minor extra ability with a reward for the player of coolness and gameworld lore.
