The Falchions sold by Dort Weasenbury in the Upper Marketplace have a -1 damage penalty. I assume this is a bug as they are the only weapons that have this (even warmaces and scythes don't have it).
IIRC it's to balance the weapon out a bit. You can still find some falchions without the damage penalty as loot, though they're rare, I believe.
The salt from all Wiggyboy's tears eroded every falchion in the server, so the rumour goes..
Considering neither scythes nor warmaces have this penalty, I don't see why we're singling out falchions. Hell, great mauls are incredibly powerful (I would say more powerful) as they do bludgeoning which few (if any?) monsters (such as swarms, skeletons, slimes, etc.) have resistance to compared to the greataxes/greatswords.
I believe it is because of the 18-20x Crit range
This is as intended by the team. Closing thread.