The woollen and worsted process both require that the wool (and other similar amimal fibres, cashmere, camel etc)are cleaned before mechanical processing. Woollen and worsted nomenclatures apply only to the textile processing of animal fibres, but it has become common to include fibre blends under these terms.
The resultant fabrics will be classified as being either woollen or worsted, but this designation is assigned during fibre processing and yarn formation, not in the cloth or finished garment.
A woven woollen fabric is one which is subjected to fabric finishing techniques designed to add a directional pile - in that the end consumer can 'stroke' the garment in a single direction (shoulder to cuff etc), such as a casual jacket. This feels like the fibres are directionally arranged.
Woollen yarn formation is also very common for knitwear, where the resultant garment has some bulk and the requirement for visual aesthetics (of fibre alignment) is minimal.
The worsted processing route is more complex and requires the removal of short fibers and the use of a focussed mechanical process to make the individual fibres parallel with respect to each other. The yarn formation process is significantly more comprehensive and results in a very sleek yarn which will offer a clean looking woven fabric, such as for suitings. The worsted process is significantly more expensive and is seldom used for knitwear.
We can get into a lot of specific details here, including when and how to impart colour, if desired.
The rolag is spun without much stretching of the fibers from the cylindrical configuration. This is done by allowing twist into a short section of the rolag, and then pulling back, without letting the rolag change position in your hands, until the yarn is the desired thickness. The twist will concentrate in the thinnest part of the roving, thus when the yarn is pulled, the thicker sections with less twist will tend to thin out. Once the yarn is the desired thickness, enough twist is added to make the yarn strong. Then the yarn is wound onto the bobbin, and the process starts again.