In order to make you gear stronger, it need to be taken to the Blacksmith and upgraded into a stronger item. The Blacksmith requires gold, Orn, materials, and time. Each time you take the gear to the Blacksmith it will get stronger. When the gear is ready you will get an in-game message that it is ready to pick up. Visit any blacksmith to pick up your gear again. Here is a chart of the time table for upgrading.
Use the following link to figure out a pretty close estimate of what you gear will be at each level. Props to Vuso on the Discord for making this calculator.