Mdina is a good place to buy small gifts and souvenirs including local crafts. Most of the shops are along the main (though still tiny!) thoroughfare, Villegaignon Street. Not far from Mdina is the old airfield of Ta’ Qali which is now home to the Ta’ Qali Crafts Village – a collection of Nissen huts converted into craft workshops and sales outlets for silverwork, glasswork, stone polishing, carpentry, pottery etc. (open Mon-Fri 9am-4pm, Sat 9am-1pm).
Mdina is in Malta. For general advice on shopping in Malta, see my Shopping in Malta page.