What is handmade?
Basically Etsy defines it as almost anything. Basically hand-assembled was "handmade" - so string a charm on necklace was handmade and designing a product but having it manufactured also is if you orchestrate the process. They also made this a dead topic in their forums. It usually happens when someone who sells something that is on the edge complains (no insult intended)
What is the line where an item is handmade or are there levels of handmade?
Obviously the charm necklace you buy at Target isn't handmade but is it really handmade if you buy the same charm and a chain and slide the charm on. Etsy said it was. A cluster of charms and beads in a unique way - well you're getting closer. You made the charm or pendant yourself - definitely handmade.
The best explanation I found is how raw are the materials you start with. That single charm is pretty much a finished product so not raw. You put a couple together - a little more work is involved. You made the charm/pendant? Definitely but even there, you can apply the same rule.
Then there is the question of embellishing a finished item - I'd say it depends.
This watermelon stool definitely is. It's suddenly makes you look at it differently, it's creative - it's a product than a plain stool would be. It's an original design.
It goes on and on. Within the handmade community, this can be a hot topic and can push a lot of buttons, it an interesting topic that is really hard to define.