Do items dropped in the world / dungeons persist ? Or can they disappear ?
If so, are there any better ways to stash items ?

people place items in a chest if they want to keep but not carry it

Coming fresh from playing Might and Magic, i kinda forgot that was a possible option - since the chests in that game just disappear.

Are items in chests safe then ? No NPC coming by to grab anything ?
I keep hearing about the simulated NPC groups in this game so i'm a little paranoid about that :)

Items dropped on the ground do remain there.

Good to know :)

I've started to also run the CosmicForge Editor and attaching it to the game, it seems to show items that were dropped by the player, pretty interesting and handy ( but also borderline cheating :D ).

the game has to rendor items dropped on the ground but not items inside a chest

I think it's the same with W8. I try to make it a habit of picking up all items on the map. I keep what I will use, sell to a vendor what I don't want, and whatever useless quest items (Damaged Black Box, Marten's ID Badge, etc) that can't be sold, I put in a chest, so it doesn't slow down the game.

How do you put items in a chest btw ?
All the chests i open disappear.

Also the game is not drawing any items on the ground, unless you step on the square ( and then it only shows the topmost one in the lower right ).

Are you talking about Wizardry 7 ?

Maybe i should also mention, i'm not playing Wiz 7 Gold, i'm playing the DOS Version that comes as an extra installer.
Maybe Wiz 7 Gold has all these things.

So .. it seems to me that dropped items in the world may actually be limited to a certain amount, but i might be wrong, not sure.

I'm playing with the "CosmicForge" Tools attached to the game, and it shows you the items in the world, as well as the number of them.

I just walked to a spot in New City where i had dropped some armor, and it was gone.
Looking at the CosmicForge display, it showed that there were 127 items in the world.

127 is one of those types of numbers that can easily pop up during programming ( without going too much into the details ).

I then dropped another item to test, and the 127 did not go up.
I picked up a few items, it went below 127, but after dropping some more items, it never went past 127.

So my guess is, that 127 dropped items is the hard limit, and that the game removes either the oldest items, or random ones, when dropping a new item once the limit is reached.

Well, that's a bit scary, but good to know anyway.

Another reason not to litter i guess ;)