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The word 'throw' is used to describe the launching of certain weapons or the use of certain items. However the official throw function is an inventory manipulation method. It is activated by selecting a hotbar item and then pressing the throw key (T by default) or by selecting an item in inventory and them pressing the escape key, thus closing the inventory screen and throwing the selected item at the same time. A third way to do this is to click on an item from your inventory then click outside of your inventory. You will always throw in the direction you are facing.A thrown item travels around 4 blocks on a level surface before coming to a halt. Because of the limited range, some players have taken to calling this function 'drop', though that term is also used to describe items gained by killing foes. Throwing a weapon in this way deals no damage to anything hit by it, and throwing a tool in this manner doesn't activate any special effects (Grappling Hooks don't grapple, buckets don't fill if they fall in water, etc.). Because pressing the throw key causes the active item to leave your inventory, have a care what you throw when you're close to lava, unless you want to obliterate it (lava will not affect items of rarity 1 or higher). Due to the dangers of lava players will trade with NPCs even at no value, to 'throw away' items.
A thrown item can be picked up by any player. As such this is the primary way to trade with players on a multiplayer server. The only other way to trade is to put items in a chest for the other player to pick up later.
Items that stack are generally thrown as a stack. Torches on the other hand are thrown one at a time. This allows you to throw one or more light sources down a shaft to illuminate the way down briefly, or illuminate the landing spot if it isn't obstructed. This is a good way early on in the game to check how far down the next ledge is in a dark cave.
Fallen Stars can be thrown but will disappear instantly if it is not night, so take caution when trading them.