It's not any particularly medieval costume, it's a mix of things with some Republican Rome, Medieval Norse, and I think some Sami influences, but it has the spirit of medieval clothing. Just seeing happy medieval people in colorful clothing, like this has been a pet peeve of mine since Game of Shit
came out and everyone decided that medieval is brown and miserable and covered in shit. The old wizard does such a good job. He totally sells the eccentric but wise wizard. Goofy one moment, dignified and a little sinister the next. And he's also *not Gandalf*. A wizard who is Not Gandalf is beyond
the ability of many storytellers. The chief warrior who fights off and defeats the death dogs is a black little person and I really wonder if there's been another movie in the history of cinema that gives a black little person the role of a skilled warrior. Willow being the protagonist, and he's a
dad, a wife guy, a farmer, and a smart wizard instead of being the murdery murder guy. Some people do wear leather, but they're wearing vests and aprons that look like actual workwear. The old wizard conspiratorially telling Willow that he's not really reading the bones, but rather using them as
a way to legitimize his pronouncements is a cool way to show how the wizard recognizes Willow's integrity, wisdom, and potential. The old wizard is on screen for like five minutes but he's one of my favorite characters in cinema. The way the kids list out all the monsters they're afraid of and it
foreshadows all the monsters and magical being the heroes encounter later in the movie.
My personal tradition holds that M Python's _Holy Grail_ really pioneered the muddy brown (iirc deliberately, because Terry Jones was fed up with Technicolor Medieval Epics), but you can overdo many things and that one has certainly been overdone plenty since
Ironically I think Holy Grail has some of the better medieval costuming when weighed against the vast majority of medieval films, which is just absolutely ridiculous.