An army blanket is a large blanket that generally consists of eighty to one-hundred percent wool in a sixty by eighty inch rectangle. The specifics are defined in Milspec MIL-B-884-L, if you would like to look. Their popularity among GIs returning from World War Two has made the term has become a catchall for any large, rough wool blanket.
Fallen soldiers are often wrapped in an army blanket when they are buried in the field. Army blankets are commonly used by emergency relief workers because of their excellent insualtive properties. They can help hypothermia victims regain their body heat and can prevent the core body temperature of people in shock from dropping to rapidly. They are not waterproof, but the tight weave of the wool makes an army blanket fairly water resistant. When the army did issue them to soldiers they were often used to create makeshift tents. They are a wonderful thing to keep in the trunk (or boot, if you're British) of your automobile. Not only can they keep you warm if you get stranded in the Wintertime, but they can also be used to keep large items from getting knicked up when you take sharp turns. They also work well if your car is snowed in and you need traction. Just shove it up under the drive wheels and hit your throttle. Don't have sex on an army blanket. They're a little too scratchy for that.