Tombstone

You do not craft or find a tombstone the normal way. You die, and the game throws one out of your corpse. It bounces along until it finds two flat tiles to stand on and plants itself there. If it never finds a spot, because you died in a narrow shaft or over lava or on a slope, it eventually gives up and vanishes, and that one is simply gone. Two of them will not settle on the same footing either, so repeated deaths in a cramped spot lose stones. Which variant you get is random, except that dying with a decent pile of gold in your inventory upgrades it to the golden version. Each one carries the death message the game wrote for you plus the real world date it happened on.

Permanent death means you are not collecting your own headstones, so the game moves the source. In a world that has hardcore characters in it, town NPCs drop tombstones when they are killed. The Merchant and Tax Collector leave golden ones and everyone else leaves a plain variant, still rolled at random. The exceptions matter if you are counting on this for building material. The Angler and the Princess leave town rather than die, so they never produce one. The Traveling Merchant does drop one despite never having moved in. The Old Man and the Skeleton Merchant do not.

Cluster enough of them together and the screen itself changes. A handful in close proximity starts draining the color out of the area, and pushing past that flips the region into a full Graveyard with its own music, background and effect on NPC pricing. For most people that is the entire reason to want tombstones. The catch comes on the way back out: breaking a placed one can spawn a Ghost somewhere off screen, and the odds get worse in the harder world difficulties. Journey Mode does not protect you, because that particular spawn ignores the enemy rate slider even when it is turned all the way down.

The reliable method is to make dying fast and repeatable at the spawn point. Put Hellstone or Meteorite right below where you respawn and a fresh character will die on contact over and over, leaving a stone each time. Digging a deep pit under spawn and letting fall damage handle it works the same way. Flooding the spawn to drown yourself also works, but it is much slower per stone than either of the other two.

On For the Worthy and Zenith worlds the tombstone your own character throws out on death is a live weapon while it is still airborne. It hits players hard enough to kill outright and will damage enemies and critters it clips on the way down, which turns one bad death in a crowded arena into a chain of worse ones. The tombstones NPCs drop in hardcore worlds do not do this.

• Dangersense highlights tombstones, since the game treats a spot where somebody died as worth flagging.
• Abigail's Flower grows on grass near a placed tombstone at any point in a run with no progression requirement at all, and it comes up more often in a Constant world.
• Golden tombstones look valuable and are worth exactly as much at a shop as the plain ones, which is nothing.