I, tend to label everything that has to do with shrinking wool as "felting" or "felted." To be precise, however, most of my projects are primarily "fulled" wool with the occasional "felted" elements added as embellishments.
Fulling is the process of knitting, crocheting, or weaving wool yarn into fabric prior to shrinking. Generally, felting uses raw, unspun wool (roving) that is made into a matted fabric, either by hand through a process of wet abrasion or through the use of a felting needle. In both fulling & felting, the end result is fundmentally the same - a dense & strong wool fabric that will neither pull apart nor unravel. And, in both, this is acheived by subjecting the wool to shock in hot water, cold water, & agitation until the individual hair fibers swell, tangle, & mat into a cohesive mass. There is a visual & textural difference between the two in the final fabric. Fulled wool is fluffier & the individual stitches or weaving pattern may still be visible in the final fabric. I tend to think of felted wool as having a smoother texture, but that isn't always the case. It can be quite textural, in fact.
So why do I persist in calling my work felted? Because it's a familiar term to most people & one that requires no further explanation. Prospective customers are out there looking for felted handbags & hats - not fulled ones. I'm merely giving my clients what they think they're looking for. It's really all just a matter of semantics anyway.