Trophies are a class of item that primarily consist of drops from slain bandits and creatures. The bulk of this item class is parts harvested from defeated creatures. Bandits may drop trophies in the form of whatever weapons or armour they had on their person at time of death while creatures may lose items such as a feather, scales or eyes.
Creature trophies have no particular function but can be sold to the market. Trophies that drop from larger creatures or creatures that are harder to kill are generally worth more than trophies that are easier to acquire.