I am often explaining the difference between knit and woven fabrics to my clients, so I thought I'd put a simplified version of all that are textiles in writing for reference.
All fabrics are made from fibers. Fibers can be natural (silk, linen, cotton, hemp, wool, alpaca, cashmere, angora, etc) or synthetic (rayon, nylon, polyester, spandex). Some fibers are synthesized from plants, and so despite being synthetic, they are sometimes called "natural man-made fibers" (bamboo rayon, tencel, modal, cupro).
Spandex fibers are the only fibers that currently provide the most reliable stretch in fabrics. When spandex is used, it is generally the core of the yarn strand, and the other fibers are then spun around the spandex fiber.
All fabrics are made from yarn. The yarns can be composed of a variety of fibers. When fabrics are made from a blend of fibers (say Poly/Cotton/Spandex, for instance) most of the time the yarn is spun with these fibers mixed together on the same strand.
Yarns can be thick or very thin. The width of the yarn strand is known as a gauge.
Almost any gauge of yarn can be knit or woven into a textile. Some heavy gauge yarns, however, can only be sweater knit.
Yarn can be knit or woven as PFD (prepared for dyeing), which is a natural color, or the yarn can be dyed ahead of time to create a desired color. When stripes are desired, two different solid colored yarns are used on the same fabric. When heathers are desired, the yarn fibers are either dyed a variety of colors before being spun together, or the entire yarn strand is dyed one color, but because the fibers react to the dye differently, the yarn itself gets a heather look. When space dyed looks are desired, a single strand of yarn is dyed a several colors every few centimeters or inches.