Swag

Memorability of characters is really important so your readers don't forget about the uniqueness of your character (point in case being "Pants" from Twilight).

However, making a character too flamboyant can hinder their abilities to perform a lot of duties. If you're a well-known assassin and you wear distinctive clothing that people know you by, you will not live very long. Also, it makes no sense that a peasant would be wearing something with a terribly large amount of colors.

On top of this, people change their outfits. It isn't a cartoon.

 

That being said, the wardrobes of pre- industrial peoples were often very limited. In the early 1900's, you were well off if you owned one good suit.

Even the nobility in medieval times only had a few dresses or outfits in their "repertoire", so to speak. So, while characters won't wear the same clothing pieces everyday, in a pre- industrial setting they may very well cycle between only a few.

Common peoples almost exclusively wore homespun pieces and patches were frequent. Colors tended to be dull and fabrics more natural. Embroidery, lace, color, and the type of fabric were all things that distinguished a rich person from a common one.