My first attempt at something like this and I have to say it went pretty well.

INSTRUCTIONS
1- Cut two 12 x 12 inch squares of fabric, preferably something soft and cozy. I used that really soft fabric (I don't know the name) on both sides, but have also seen them done with flannel or silky fabric on one side for a contrasting feel.
2- You need coordinating colors of ribbon, cut into 4 inch strips. I did a total of 32 ribbons (1 on each corner and 7 on each side) but depending on the width of your ribbon you can use less. Try to find a variety of patterns and textures in your ribbon combo.
3- Lay your fabric
right-side up. fold the ribon strips in half and pin them to the edge of the fabric, with the folded edge toward the middle. Pin the ribbons in the middle first, then the corner ribbons diagonally over the corner.
4- Sew around the edges of the square to attach the ribbon tags, taking out the pins along the way. Backstitch on each ribbon to secure them to the fabric.
5- Take the other square of fabric and place it
right-side down on top of the tagged one, pin it together. The tags should be inside and the blanket should look inside-out.
6-- Sew around the outside, starting in the middle of one of the sides. Sew all the way around the square, leaving a 2 inch opening for turning right-side out. Don't forget to back-stitch at start and finish.
7- Trim around the edges and cut a diagonal edge on the corners.
8-- Turn right-side-out, making sure to square the corners off. Iron it flat.
9-- Either top-stitch around the edges for a finished hem-look, or hand-sew your opening shut.
Snuggle and enjoy!