Whether its an elaborate Missoni graphic or a dreadfully ugly Christmas sweater with reindeers and elves, the colourful patterns will have been achieved through the use of a technique called Jacquard.
Jacquard is a term originally from weaving. In a simple explanation it is the process of combining 2 or more colours together by knitting one colour either to the front or to the back of the fabric so as to create a visual pattern.
There are 3 common jacquards worth knowing about and you most likely have examples in your wardrobe - Tubular, All needle and Fairisle. The following examples have been created in 2 colour format so as to clearly illustrate the techniques, but remember jacquard knits can have many more colours. Some of the more famous colourful designers use 8 or more colours in a design.
Tubular - the name says it all. The knitted fabric is actually a tube, with the colours alternating from the front to the back. In a 2 colour jacquard, which ever colour is at the front of fabric, then the second colour is in the exact reverse mirror image as you can see below.
If you pull on both sides of a tubular fabric it will behave like a bag and not lay flat and smooth, and this is one of the biggest drawbacks of tubular jacquard.
All Needle Jacquard is a different approach in that all colours are knitting at the back of the fabric at the same time. Then the required colour for the design is brought forward, the backside of the fabric has a distinctive pattern which is called 'birdseye' as can be seen below. All needle jacquards have a flat and smooth appearance, but are generally quite solid and stodgy.
Reverse side of the previous fabric
The third style of pattern knit is the quintessential Fairisle, made famous by the inhabitants of the islands off the north Scottish coast and part of the Shetland islands group. The designs are very iconic with rows are repetitive motifs.
Instead of knitting the yarns at the back of the fabric, the colours not in use are 'floated' across the back. This makes the fabric lightweight, but the floats at the back are very prone to snagging on jewellery which can easily ruin a garment.
Reverse side of the Fairisle fabric
This was a quick overview of the 3 most common techniques used to create patterned knitwear, and there are other techniques such as Intarsia that can create colourful patterns, but now there is no mystery as to how the most common types of colourful knits are created.