When cutting a yard of fabric, the material is unrolled from the bolt, measured and cut at 36 inches or 3 feet in length. As fabrics come in varying widths, measurements only consider the length of the fabric when cutting.
A bolt is the piece of cardboard that holds the material. Although fabric widths have varied from bolt to bolt over time, modern material typically measures between 42 and 44 inches from side to side, called "selvage to selvage" in sewing terms. Material can also be cut into partial lengths as well, such as a half-yard, a quarter-yard and fat-eighth pieces.