Equipping gems can make your equipment more powerful.
In order to equip a gem, you must first add a gem slot to your weapon/piece of equipment.
To add slots to your equipment and weapons, you'll need to go to the gemcutter NPC.
Look for the icon on the map (hotkey M) and go there to meet the gemcutter.
Click on the NPC, then select "Add Equipment Slot" from the menu.
At this point, both your inventory and the Add Equipment Slot window will open on the screen.
Right-click on an item in your inventory to register it in the slot window.
(Required materials vary depending on the items grade.)
Click on "Make" to add a gem slot to the equipment (100% success rate).
An empty gem slot has now been added to the item.
Right-click on a gem in the inventory. The cursor will then change into a cross, and all items that can be equipped with a gem will be highlighted.
Left-click the item on which you wish to equip the gem, confirm the correct item and gem has been selected in the following window, then click OK to complete the process.
The gem has now been successfully added to the empty slot.
As shown in the picture, different HP and stat boosts are applied depending on the type of gem.
Be sure to equip gems whenever you can and make your characters as strong as possible.