Broken--2-way tie:
Erde Kaiser Sigma with the accessory/ability that reduces ether point use to 1 for any ether ability and the ether doubler in Xenosaga Episode 3. Anything that doesn't die in a single summon of Erde Kaiser Sigma can be mopped up in the second turn now that one has functionally unlimited double strength specials.
Vanish/Invis followed by any instant death spell in Final Fantasy 6(Square-Enix agreed unfortunately, so it has been disabled in the re-releases). Nothing but Kefka and the Three Goddesses could resist the one turn defeat that it resulted in.
Over-powered? The Experimental MIRV in FallOut 3. There are only 5 Super Mutants in all of the Capital Wasteland that even come close to necessitating that much firepower and it kills them in one shot! Of course, for what it is, it doesn't come across as overpowered. If anything, the fact that it doesn't level the entire landscape means that it's underpowered.
So, the most overpowered game items are either weaponized toys(or toy weapons. See Clockwork Knight for more detail) or clothing that acts like armor (such as silk boxers or negliges that can resist fire or stop bullets. See Naughty Nightwear in FallOut 3 for an example.).
