I have received an item that has been described at "excellent condition" but it was stained and had a slight "pull" at the neck. Okay, I got the stains out and it looks good I suppose. Still, I would not have described the item as excellent and would certainly expect it to be washed at least!
On the other hand, I won a book that was described as very good but had "damage" on the dust jacket and I expected a rip somewhere. I would have described it as like new and was very pleased with the item.
As a buyer, I am no longer optimistic about the condition of a used item and think at least one notch below the rating it's given so that I am not too disappointed.
As a seller, if something has been heavily used then I would just say bobbled etc through constant use but fine for play wear etc.