Khalim's Eye is a quest item in act3, found in the Spider Cavern. Once you have collected all of Khalim's relics (3 body parts and 1 flail) you can transmute them in the Horadric Cube to make a Khalim's Flail.
The Eye of Etlitch is a unique amulet with +1 to all skills and life leech among other mods.
These items are not considered to be low lvl pally items. In normal mode, you should be fine by just using the items you find and items that you buy from shop vendors.