A true oriental rug is a rug or carpet that is hand-knotted in the near, middle, or far east.

All true oriental rugs are hand-knotted.  Hand-knotting is a skilled process in which individual knots are hand-tied onto a framework of interwoven threads.  The variation of these knots, in coordination with their color and location, create both the pile and the pattern of the rug.

The name oriental rug is itself a misnomer.  Here in the U.S., most people consider the orient to be southern Asia (China, Japan, Koreas, etc.)  The majority of oriental rugs are manufactured in Persia (Iran), India, China, Pakistan, Tibet, Afghanistan, Turkey, and Russia.