organic fabric is fabric that is made with materials that grown, processed, treated, handled in an organic way, for example cotton that was grown without the use of pesticides vs. cotton that is grown with pesticides.
"Organic fabrics like cotton, wool, silk and hemp must meet regulations set by the Organic Trade Association regarding fiber processing, production, dyeing and non-toxic handling. It's important to look for organic certification on labels to ensure that a product is actually organic. Sustainable fabrics are produced without federal guidelines and certification."
http://home.howstuffworks.com/organic-clothing1.htm