As far as I know, when a monster is spawned, the game decides what items it gets, depending on the configured loot lists of the creature and the chances to equip something from these loot lists. This applies to all types of items. Therefore you can even see, if a monster is wearing something special, if the item has a unique appearance.

MIs are restricted to certain monsters. Take the famous Stonebinder Cuffs for example. They are only in the loot lists of gorgon special archers, namely pyromancers, venomancers, the gorgon heroes Cenobia and Iolanthe and the three gorgon queens in the Pythian Caves.

The higher the level of your opponents, the more powerful the items get. Weapons do more damage, armor is stronger and magical properties get stronger too. This also increases the requirements. But you can get more powerful stuff sometimes, that you can't even use yet. For example I found jewelry at some single digit level, which had a minimum level requirement of 15 or 18. Also in Atlantis on normal difficulty I found some staves that had epic properties on them. This might be a bug though.
Once you have a character on Epic or Legendary, you can use them to provide nice gear to lower level characters. The gambler NPC is a great source for that. Your high level character will probably have collected quite a number of pieces in his journey too. Don't sell them, put them into TQVault, especially legendary items and all sets starting from epic difficulty.