Evolution is a process where a fully leveled up item is combined with materials and gold to go up a rank and gain greater stats. Not all items are able to go up a rank at all.
Most C-Rank items can only go up to B-Rank.
Starter and Gacha B-Rank and A-Rank items can get to S-Rank.
Several Co-op/Event items such as the Knight Lance, and Jager Armor can only reach A-Rank.
Other items such as the Sturm Plate and Artisan Cap are stuck on A-Rank.
Event Blueprint items can reach S-Rank, while story Blueprint items can only reach A-Rank (hopefully, this changes).