Village rugs are handwoven rugs made by settled villagers in a cottage industry, usually for sale. They differ from tribal rugs, which nomadic weavers weave as part of their tradition and expression. Village rugs are often more affordable than city rugs, which are more sophisticated in design and colour. Sometimes, tribal people known as the Qahqai continue to produce rugs in a settled environment, which enables them to produce very fine pieces known as Qashquli.

Village rugs are often characterised by quality. They are often considered higher quality than tribal rugs because they are woven using fixed looms, and weavers have access to modern materials and dyes. However, they often have bold, geometric designs and versatile colours, enabling the decerning rug buyer to work out whose village the carpet comes from, as it has its distinct weaving style, including knot type, colour palettes, and symbolic designs. Village rugs will be knotted in wool on a cotton foundation.