At a camp fire, sitting round the fire, there is a lot of warm glow from the fire - but away from the fire itself, the evening cool is at your back. In order to be comfortable sitting round the fire, it became customary for campers to wrap themselves in blankets. From that came the habit of taking a particular blanket to camp in order to wear at the campfire.
Initially, it took the form of an ordinary blanket, usually a grey 'army surplus' blanket, which was worn wrapped around the back and around the shoulders. Later, some people started turning them into poncho-style garments, by cutting a neck-hole, and in some cases, adding fringing at the edges, or fashioning a hood at the neckline.
Over time it became customary to decorate the blankets too. This decoration could take the form of applique or embroidery, and many fascinating designs could be seen. Some had generalised designs, but others employed decoration or symbolism to illustrate the role an individual took at campfires - whether the master of ceremonies, the fire builder and tender, or the leader of the singing. This decoration might be done in the form of embroidery, or in applique work. In the 1920s, there was a fashion in Scouting, and to a lesser extent in Guiding, to adopt symbolism such as they imagined was used by native Americans, with 'picture-writing' using symbols which were adapted.
From the 1970s onwards, the decoration on blankets tended to be mainly badges rather than handcrafted decoration, and as a result of the demand thus generated, more campsites started to stock and sell badges. Wool blankets became less common, replaced initially by the wool 'travel rug' in the 1980s and 1990s, and more recently by fleece blankets. Neckers or sashes too, were added to the blanket, often intact, adding colour to the designs.