Choose a fabric of a length and color that you want. Cut pieces out of it of equal lengths so that a regular look is achieved. However, you can use unequal pieces if you want the rough look. You can even sew the ends to get a neat look, or leave them like that to have a frayed one.
Take a long twine or ribbon. Start tying the fabric pieces on the twine using knots. Do not make tight knots because you have to slide the fabric on the twine to make space for more.
Keep doing this until you get the length of garland that you want. Tie a knot on the end of the twine and leave a loop so that you can tie it using this.
Your garland is all ready. Hang it any where you want, even in loops. Make loads of them using scrap fabrics around the house and experiment with both color and design. This is also an example of recycling stuff if you are the resource conservationist type.