Something you make with your own hands, especially an ornament or decoration, is a handicraft. You might buy some local handicrafts on your trip to Mexico, like woven bags or handmade toys, as gifts for your family. Things that are made with machines or on a large scale aren't considered handicrafts.
Handicrafts were later improved and adapted according to environmental conditions, eventually becoming "traditional" and accepted as an art that reflects the artistic sense, feelings and cultural characteristics of a society.