A bath towel is used for drying one's body after bathing or showering. It is typically rectangular, with a typical size around 30"×60" (75×150 cm). A large bath towel is sometimes called a bath sheet. Some smaller bath towels are designed for use as bath mats.
A beach towel is usually a little bit larger than a bath towel. Although it is often used for drying off after being in the water, its chief purpose is to provide a surface to lie on. They are also worn for privacy while changing clothes in a public area, and for wiping sand from the body or objects. Beach towels often have colourful patterns printed or woven into them.
A change of towels, as supplied by maid service in an American-style hotel, is one bath towel, one hand towel, and one washcloth.
A foot towel is a small, rectangular towel which, in the absence of a rug, carpet or bathroom mat, is placed on the bathroom floor to stand on after finishing a shower or bath.
A hand towel is significantly smaller than a bath towel (perhaps 30x60 cm), and is used for drying one's hands after washing them.
The term kitchen towel can refer to either a dish towel or to a paper towel, the latter usage being primarily British.
A paper towel is a piece of paper that can be used once as a towel and then be disposed of. A perforated roll of paper towels is normally mounted on a rod a little longer than the width of the roll, or in an alternative type of hanger that has indentations on ears, the indentations fitting into the ends of the paper towel roll. Paper towels can also be found packaged like facial tissues, as individual folded sheets.
A show towel is a sub species of the common bath or hand towel that has had trim, such as satin, lace or linen stitched onto it, or embroidery done on it, mainly to simply "look nice". They are used to add a decorative touch, usually to a bathroom, most commonly in the USA. They should not be used to actually dry anything, as regular washing ruins the added trim, and the towel buckles as well (because the towel usually shrinks differently than the trim). 
A sports towel or chamois is a towel used by swimmers and divers, it is a super absorbent towel that wipes water away and when it becomes too wet and can be squeezed to get the water out of the towel so it can be used again.
A sweat towel is often of similar size to a hand towel, and can be required in gyms in order to wipe down the machines after use.
A tea towel (British English) or dish towel (American English) is a cloth which is used to dry dishes, cutlery, etc., after they have been washed. In 18th century England, a tea towel was a special linen drying cloth used by the mistress of the house to dry her precious and expensive china tea things. Servants were considered too ham-fisted to be trusted with such a delicate job, although housemaids were charged with hand-hemming the woven linen when their main duties were completed. Mass-produced tea towels were produced during the Industrial Revolution. Today pictorial tea towels make charming and collectible souvenirs.
A washcloth, wash cloth, flannel, or face cloth is a small square about the width of a hand towel, and is used by wetting, applying soap to the towel, and then using the towel to apply the soap to skin. This increases abrasion, and can remove dead skin cells from the skin more effectively than just manual application and rubbing of soap.
A wet towel (oshibori) is used in Japan to wash one's hands before eating. It is often given to customers of an izakaya.
Towels are often used for purposes other than drying things. For example
To sit, lie and stand on, to avoid direct contact with the ground, rock, chair, etc. This may be for hygiene and comfort, and in saunas or other places where nudity is common.
Barbers use steamed towels to prepare the skin for shaving.
To reserve seats, for example sunloungers, by the side of swimming pools or similar locations (a source of annoyance to some and amusement to others).
A towel can act as a make-shift garment or blanket. There is a variety of uses when a towel is applied in this manner. For example, the towel can be used as an extra layer of clothing for cold conditions; or can be worn on its own around the waist (similarly to a kilt or skirt) or just under the shoulders (similarly to a long dress), usually in a warm environment.
In Asian countries, towels (smaller in size than hand towels - usually square 30*30) are used as handkerchiefs. Men and women both carry them. The softness of the Turkish-type towel makes it a favourite for use.
In some cases, a towel can be used to protect its owner (as well as other people). For example, a damp towel can be used to block the gap between the door and floor to help stop noxious gases or smoke from entering the room. This is especially useful in case of a fire, where, in most cases, people die of smoke inhalation before the fire reaches them.
On cruise ships, towel animals are created for the patrons.
Towels can also be used like a whip in what is known as towel snapping.
To hold hot objects, much like an oven glove.
Towels may also be used as a head dress for wet hair.
Towels can be used as a "sling" for a broken arm.
Towels are often used for "ice blocking."
In boxing, a trainer will throw a towel into the ring to concede his fighter's defeat in that match. This is called "throwing in the towel."
At sporting events, sometimes towels are handed out to fans to wave around to cheer on their team.
Appearances in popular culture
Towels played an iconic role in The Hitchhiker's Guide to the Galaxy. They are described as the most "massively useful thing an interstellar hitchhiker can have." The fictitious time/space traveller and Guide Researcher Ford Prefect uses the idiom "a hoopy frood who really knows where his towel is" to mean someone generally alert and aware. Some fans of Douglas Adams have seized on this idea, and towels are now considered a symbol of one's devotion to the Hitchhiker books, radio series, TV series, website, etc. Towel Day is held each year in memory of Adams.
In the cartoon South Park a character named Towelie is a walking, talking towel that was artificially created in a lab for military/subversive purposes. As a reference to Hitchhiker's Guide to the Galaxy he frequently reminds people to bring towels, because you'll never know when you'll need a towel. As a character, he has a marijuana addiction.
Fans started using Terrible Towels in the 1970s to encourage the Pittsburgh Steelers as they sought (and eventually won) an NFL championship.
In 1982 Roger Neilson, the then head coach of the Vancouver Canucks, waved a white towel on the end of a hockey stick in mock surrender at what he felt was a sequence of unfair penalties during a playoff game against the Chicago Blackhawks. This became known as Towel Power. The following game thousands of fans brought and waved towels and it has remained a traditional way for fans to show their support during the playoffs. During Playoff games, GM Place hands these towels out bearing the Canucks logo.