Velvet is one of the most luxurious fabrics around, in both texture and drape; heavy enough to hang elegantly, conforming to curves and falling gracefully over corners, it is eminently suitable for formal clothing or for drapery.
The most immediately striking feature of velvet is its rich colouring. The play between light and shadows created by the pile make for remarkably intense colours; even from a distance, it looks sensual and tempting.
True velvet is a woven pile fabric; that is, the production technique incorporates loops made from an auxiliary set of warp yarns, which are later cut to produce a soft pile. A similar method is used to create corduroy and velveteen, only for these two the pile comes from loops in the weft.
The weaving technique dates back to as early as 2000 BC in Egypt, where samples of exquisitely fine linen and silk fabrics have been unearthed. An inventory list from 809 AD, of treasures belonging to Caliph Haroun al-Rashid, includes five hundred bolts of velvet. That these pieces were included alongside gold and extravagant jewellery is indicative of its enormous value at the time; the process of weaving velvet was extremely labour-intensive and time-consuming, because of its fineness.
Velvet production became firmly established as an industry in the Middle East and eastern Europe by about the tenth century. The most skilled weavers came from Turkey (also renowned for its kilim rugs), Greece, and Cypress; when the latter was conquered by France in 1266, many artisans were forced to flee to continental Europe. Most settled in Lucca, Italy, already a major centre for the production of fine woollen textiles, thus allowing for the spread of velvet-weaving techniques further north into much of western Europe.
Moorish Spain was a second major centre of velvet production; it had been manufactured there since 948, and various velvet-weavers' guilds and organisations served to ensure the industry's prosperity.
The first reference to velvet in England came in 1278, when according to records the king's tailor purchased a velvet-upholstered bed in Paris at a cost of 100 shillings. It then became enormously popular; and by the late Middle Ages it was in common use for upholstery, drapery, and clothing, amongst those who could afford it. Because it was still woven by hand -- weaving would not become automated until centuries afterward -- its cost was exorbitant and therefore out of the reach of all but Europe's wealthiest noblemen.
Velvet was still important in the Middle East; there it was called mukhmal, and its popularity as a visible sign of affluence endured well into the Renaissance. In Europe, velvet weaving techniques were a well-kept secret; passed down through weavers' guilds, the methods were kept hidden from those outside the industry, until Napoleon abolished the guilds during the French Revolution.
Through the Middle Ages and the Renaissance, velvet was almost always woven of silk. Occasionally, linen was incorporated into the warp to lessen production costs; this was referred to as half-silk velvet. Hemp was sometimes used for this same purpose, though cotton warps seem to have been conspicuously absent. Velvet remained in the realm of the upper classes for centuries, until the Industrial Revolution ushered in a new era of mechanisation and mass-production, and suddenly luxury fabrics became affordable.
Contemporary velvet is often woven of rayon or acetate, both of which have served as substitutes for silk since the Second World War. Several different types have evolved, differing mostly in how they have been finished. Plain velvet is just that: plain weave fabric with a cut pile. Crushed velvet is made when plain velvet is dampened and then mechanically twisted, creating a new textural dimension. Panné velvet is similar in appearance to crushed velvet, but its texture comes from heavy pressure applied to sections of plain velvet rather than from twisting. Cut velvet differs slightly from the rest in construction; it involves often intricate, brocade-like patterns in relief, made by cutting the pile in some areas and leaving it in loops in others.
Often confused with velvet, velveteen differs because of its shorter pile, which originates from extra loops in the weft. Velour is also similar to velvet in both texture and weight, but it is made from cotton rather than silk or synthetic fibres and in the same manner as velveteen. Many knit fabrics with pile added can resemble velvet, and are sometimes mislabelled as such; this is erroneous, however, as velvet is always woven.
Because careless folds and creases can permanently flatten the pile and leave a velvet garment ruined, careful attention must be paid to proper care and storage. Steaming is the best way to remove creases; alternatively use a velvet board, which is a specialised type of ironing board with hundreds of fine wires sticking out of it to preserve the pile whilst it is being ironed. For cleaning, dry cleaning seems to be the most agreed-upon method; manufacturer's directions take precedence, however, so read the label first. Some velvets can even be machine-washed.
Sources:
Brandon, Karen. "The luxury, the indulgence that is velvet...". http://www.fabrics.net/amyvelvet.asp
de Laval, Giles. A Brief History of Velvet. http://www.florilegium.org/files/TEXTILES/Hst-of-Velvet-art.text
"Rich History". http://www.metrofashion.com/fashionkeywordvelvet.html
Also, a pamphlet apparently published in the 1950s that came with my grandmother's velvet board.