Rule 2: Do not rip artwork. Ever!

Always clearly state what your references were in making a piece. If you sketched in pencil, color-reduced to 1bit and then went to work on it, okay. Ways like this are completely accepted and nobody's going to shout at your for it, but it's good to know anyway. If you stole somebody else's artwork, 1bitted it and then submitted it for critique, not okay. If caught red-handed, by moderators or users, and the case is clear you ripped, you will be banned and forgotten forever. Other similar instances of fraudulent behaviour like posting other people's artwork without permission (regardless of them being edited or not) or jobs without delivering the promised payment will reap similar rewards.

Rule 3: Post only pixel art.

Now this is a bit of a controversial subject, but it hopefully can be cleared out at least so we can go on with our business here: Pixel Art, is art where there's specific attention paid to the fine manipulation of picture elements. It deals with the informative quality of specific, single pixels. If the art you're about to post has not been pixel-pushed on that level, don't bother. Automatic AA, soft brushes, filters, smudge tools, all are indicative of index-painting, or at least dirty-tooling, but do not always mean your art will not benefit from pixel-level critique. If you've made something using some of these tools and then you're able to reign the piece in by optimizing the palette into using the best possible amount of colors, went in and pushed single pixels until everything is right, then it's probable we'll be able to talk about your art and how it can be made better. Always be clear of how you made things, only post concept art when it's relative to a pixel-art piece you've made and never never try to decieve us. As above, workstages and process animations are optional, but always welcome.

Now, the trick is how do you squeeze thousands (if not million) colours palette into 11 colours (hires/multi char mode) and still preserve the high quality of the original image.(...)

and lastly: besides 4 or 5 extremely gifted pixellers like mermaid and i think STE , I think loads of people use this method. I am wondering who would like to claim or state that they never do this r have done it.

I (sadly) think the golden era of hand pixelled gfx is gone forever due to at least two reasons:
1. Life is faster – people are spending too much time playing with useless apps on their mobiles hoping to make their life actions more efficient (= waste of time and illusion IMHO but that's another topic) ;-)
2. Effort/reward ratio – no way you can hand pixel 2 screen pic in 12-14 hrs, even with limited palette and sophisticated pixelling tools (brushes, dither box, etc) – and it took me similar time to code the editor (http://c64.blog2t.net/slixed). I mean it's A LOT of time in REAL LIFE (yes, we're no longer in our teens).
3. There are great conversion tools (i.e. Timathes), which we haven't had in late '80s/early '90s – you HAD to pixel by hand (or use "analogue" conversion methods)

I'll give you the only reason - it's this attitude. And that attitude has become too common in the scene.