I think what you are wanting to know is the difference between WET felting and needle felting. Wet felting is the process of taking an oversized item (typically knit or crocheted) and reducing its size through the use of hot water and agitation. Item sweater mostly will have to be 100% wool for BEST results but can be a minimum of 80% natural animal fiber. Wet felting will shrink more in length than width. Needle felting is is the art of taking loose fibers - typically colored rovings and using barbed needles and a mat and 'punch' them into itselt to create a denser fabric or shape or animal. You can go to my site an scroll through and see a few tutorials.