Pashmina is a textile which became popular in the West in the late 1990s. It is very soft and warm, and used primarily in scarves and shawls. The word is derived from the Persian word, which refers to the undercoat of fur on many animals - in this case, the goat. There is much confusion regarding the terms cashmere and pashmina. Traditionally, "Pashmina" is the Persian word for pashm meaning finest wool fibre, the "soft gold" king of fibre’s. Pashmina is the original term for the pashm, once it has been spun into yarn. However, since Napoleons time, Europeans have used the word Cashmere to describe this fibre whilst the term pashmina has been used to describe the traditional shawl or stole that is made of either pure cashmere, or a mix of cashmere and silk, and is draped over the shoulders by Nobles and Royalty. Pure Pashmina is a luxury even in India so local weavers combine the Pashmina fibre with silk to impart durability and lustre to the material.
The legacy::Pashmina is usually made with wool from the underbelly of the Himalayan goat. Pure pashmina scarves and shawls are available, though many people find them too coarse or rough. A softening process is used by some manufacturers dealing in 100% pashmina. This process gives the pashmina a soft, almost silken quality. Because of the softness of processed pahmina garments, pure pashmina will often be referred to as cashmere. Pashmina refers to a type of cashmere wool and textiles made from it. 
The name comes from Pashmineh, made from Persian pashm (= "wool"). This wool comes from changthangi or pashmina goat—a special breed of goat indigenous to high altitudes of the Himalayas. The wool has been used for thousands of years to make high-quality shawls that also bear the same name. The goat sheds its winter coat every spring and the fleece is caught on thorn bushes. One goat sheds approximately 3-8 ounces of the fiber. Villagers would scour the mountainside for the finest fleece to be used. Cashmere shawls have been manufactured in Kashmir and Nepal for thousands of years. The test for a quality pashmina has been warmth, feel and the passing of the shawl through a wedding ring.
Every spring/summer, Himalayan farmers climb these mountains to comb the fine woollen undercoat from the neck and chest of, the Capra hircus goat. The fleece consists of the very fine, crimpy down and the usually longer, outside, coarse, straight guard hairs. Cashmere fibers must be separated, either by combing out the down or by using a commercial dehairer on sheared fibers. It is painstakingly sorted to remove any coarse hairs, sand and loose dirt reducing the yield. A yield of at least 30 percent down is desirable, but is not the average by any means. Buyers pay on the down weight or weight of dehaired fiber, not the weight of the entire fleece. The longest, finest down is used in knitted garments and the shorter down in woven fabrics. Because it is only 14-19 microns in diameter (the fiber must be under 19 microns to be labeled cashmere), it cannot be spun by machines, so the downy wool is hand-woven into shawls. It takes the wool of three goats to produce one shawl.
For centuries, wealthy families in Kashmir, India and Nepal have included fine pashmina shawls as part of a daughter's dowry. Prosperous families in northern India are regularly visited by a pashmina-shawl wallah (vendor), and as Harpal pointed out, "A reputable shawl-wallah protects his livelihood by selling only good-quality shawls. It is a door-to-door business, and a stylish and well-dressed Indian woman from a good family will buy at least one or two new shawls each winter." In Kashmir, shawls are not for young girls; rather, they are for women to wear at weddings and social occasions. A Kashmiri woman will start acquiring shawls at about the age of 16 or 17, and five to eight shawls is average for a woman's collection.
The following is an excerpt from a traveller’s blog of the making of the shawls:“The men sat around the perimeter of a single room with their backs to tall windows that cast an even, diffuse light on their work. Embroidery is a daytime activity because the best work cannot be achieved under artificial light. Ali Muhamad explained that shawls may be embroidered with a narrow or a wide border, or all over, and that the stitching is always done with silk thread. Only one person embroiders a particular shawl, he said, because everyone stitches with a slightly different tension, and that must be maintained to ensure that the finished piece is uniform from edge to edge.The embroiderers start work when they are approximately 18 years old, and most stop at about 50, or whenever their eyesight begins to weaken. Because most are also farmers, it is seasonal work. In their colors and designs, the embroiderers often depict the flowers and trees of Kashmir. There are common motifs, such as the leaf of the chinar tree—a variety of plane or sycamore that has characterized Kashmir since Mughal times—but Muhamad's embroiderers work from more than 10,000 designs that have been developed over the last 150 years by his family and carved into woodblock stamps. Using water-soluble ink, these are used to print the embroiderer's guide on the plain shawl. A design master and an embroidery supervisor then select initial color combinations. A small sample section is completed and, if it looks good, the embroiderer begins his long task. A top embroiderer can earn about 400 rupees ($8) a day.”
Here is a good long video that just captures all essential parts in the making of the shawl. Though the video may not be Indian, it is included just to emphasise the labor and craft involved.
Although the Pashmina shawl has been popular with aristocracy in Southern Asia since the 15th Century, pashmina sales in the West suddenly took off in 1998 when designers in London, Paris and New York started to include them in their fashion collections. 
For many centuries Kashmir was the only place the fiber could be woven into shawls, but today although the traditional Kashmiri shawls are still embroidered by hand in India, most of the worlds pashmina shawls are woven on handlooms in Nepal's Katmandu Valley and most are woven on a warp of spun silk for increased suppleness and strength. In recent years this silk and cashmere blend has become the passion of the western fashion world. .Fashion gurus now pronounce it as essential to the wardrobe as the ubiquitous little black dress.To meet the demands of cashmere lovers, the goats are now commercially reared in the Gobi Desert area in Inner and Outer Mongolia. The region has identical harsh weather conditions to those of the Himalayan region, and is thereby apt for the goats to grow this inner wool, but also has acres of grazing ground to produce cashmere economically and commercially. During spring (Molting Season), the goats shed this inner wool, which they grow all over again during the course of the winter. The inner wool is collected and spun to produce cashmere. The quality is just as high, while the costs have become more reasonable as a result.When pashmina shawls rose into fashion prominence during the mid-'90s, they were marketed dubiously. Cashmere used for pashmina shawls was claimed to be of a superior quality attributable to the enhanced sheen and softness that the fabric (cashmere blended with silk) encompassed. In the consuming markets, pashmina shawls were again defined as a shawl/wrap with cashmere and silk, notwithstanding the actual meaning of pashmina—which is technically an accessory of pure pashmina and not the blend.
There are literally hundreds of wonderful uses for a pashmina shawl from a visit to the opera to and evening walk in the park, from lunch at the Ritz to dinner on the patio, from a sunrise on a Mediterranean beach to a sunset on the Swiss Alps. It can be elegantly worn from autumn right through to spring as well as on those cool summer evenings and is so fine and light it can be folded up and neatly carried in your handbag or briefcase.A pashmina shawl will provide you with many years of pleasurable wear as well as making the perfect gift.