You cut small bits of yarn and glue it onto the cloth, one by one. I used an ordinary glue stick. Textile glue is possibly better, but I didn't have any. Yes, it it terribly messy and takes a lot of time. About two hours for this one. Very restful.
When you have fisnihed, and the glue has dried, trim the long edges and fringe the short edges. The fringe makes all the difference: how it really looks like a rag rug.
Here you can see it in its room - which I haven't shown yet, so make sure you come back to see more of it.