Look closely at a towel and you will see that its surface is made of thousands of tiny loops. These loops are called the pile, and the towel's whole character lies in them.
The higher the loops, the larger the surface area: the towel absorbs more water and feels fuller. But very long loops can catch on a ring or a watch strap and get pulled. The twist of the yarn matters too. Towels woven from untwisted or low-twist yarns (known as "zero twist") are incredibly soft, because the fibres open up freely. The price is more shedding and a shorter life. Tightly twisted yarns are a little firmer but much more durable.
When buying a towel, look at the edges too. Are the hems stitched closely and neatly? Is the border, the flat-woven band at the end of the towel, in harmony with the body? Towels start to wear first at the edges. A professional usually judges a towel by its edges first.