Usually the two words carpets and rugs are used interchangeably. Both are floor coverings with the only difference in size. Rugs are smaller than carpets.
Rugs : Rugs do not usually exceed the length of 2m (6.5ft). They usually have multiple uses. They may be used as centerpiece flooring, or hung on wall. They may be used as foot rugs sofa or bed throws or as table decor. They usually have an artistic or stylish touch in terms of patterns, shape or color. They may be as per the themes for a kids room, prayer rugs, for a lounge for a dressing room etc.
The style of the rug varies with the purpose. Hand knotted rugs may have intricate patterns of traditional Persian style or more contemporary types but have a rather fine finish. As per the size and purpose, they can be used as wall decor, on table tops and sofas or to give an accent to the flooring. Tufted and felt wool rugs are also used in the same manner. Shagged rugs are more commonly used as bed or sofa throws or corner foot rugs.
Carpets : Usually anything larger than 2m or 6.5ft is termed as carpets. They are primarily used as floor coverings. They accentuate the theme of the room. They may form the plain wall to wall covering to the wide centerpieces.
They may be hand-knotted, tufted, machine made or felt wool. The hand knotted carpets may have intricate patterns or simple geometrical ones over all, in center or in the corner with the traditional appeal or the contemporary style. Machine made plain or with an overall patterns are used for wall to wall coverings.