Runewords are special items that can be crafted through socketing runes into common rarity items. (White items) The required sequence of Runes can be found in the Runeword tab in the Journal. You need the EXACT amount of sockets and the EXACT sequence to create the Runeword.

The best Runeword bases are common items with a random extra stat, usually [+{1-5} to All Skills], these often drop without sockets, which have to be rolled on them prior to crafting the Runeword.

Yes, but the Star Levels only affect the base item, not the stats granted by the Runeword effect itself.

You can clear the sockets of you item through the [Clear Sockets] craft in the Crafting Cube. You can find the Crafting Cube in any Town.

Note: This will destroy the runes.