The distinguishing feature of worsted yarn is the parallelisation of long fibres and the elimination of short fibres.

The fibres in woollen yarn are not parallel, lie in different directions and are short.
Worsted yarns are therefore strong & lean.
Woollen yarns are relatively weak but bulky.

Traditionally the worsted method has been used for longer staple wools which obviously lend themselves to being parallelised. This layout of fibres enables light to be reflected in a characteristic manner which accentuates the lustre inherent in longwools.

Woollen spinning of longwool will detract from the lustre and produce more voluminous yarn.

It would seem that the distinction between worsted and woollen spinning existed in Anglo-Saxon times; but the name ‘Worsted’, to identify a particular type of yarn, can be traced to the Flemings. In the 12th Century, flooding in Flanders forced the emigration of spinners and weavers to England. one of the earliest settlements for these refugees was Worstead in Norfolk, which gave its name to the distinctive type of spinning produced by them.

Clearly they must have developed a method of straightening the fibres and removing short lengths (noils) – a method of combing which became the overriding definition of worsted yarn – parallel long fibres.
Semi-worsted yarn is parallel but without combing, and thus contains short fibres, is less lean, and has less lustre.
It should be borne in mind that worsted spinning is a very much more protracted process than woollen spinning, with many more stages – involving doubling and drawing.

Wensleydale and other lustre wools reflect light because the scales overlap by only one third compared with woollier wools where the overlap is two thirds. If the yarn contains long fibres only, with fewer joins between each fibre, the lustre will be that much greater.

Originally worsted spinning was developed for cloth manufacture. in the Middle Ages the style of dress between rich and poor was very obvious: fine worsted cloth and homespun rough woollen.
Worsted yarn is, however, perfectly suited for knitting, as long fibres impart strength provided the yarn is structured appropriately.
The choice of twist factor must produce a ‘knitting handle’ consistent with resistance to abrasion. the plying twist should be balanced to impart resilience – usually, but not always, a non-torque requirement where the residual twist of a single yarn is equal in total to the folding twist, but obviously opposite in direction.