Textiles, in combination with advances in materials and design, offer exciting new possibilities for human and environmental interaction, including biometric and touch-based sensing. Previous fabric-based or flexible touch sensors have generally required a large number of sensing electrodes positioned in a dense XY grid configuration and a multitude of wires. This paper investigates the design and manufacturing of a planar (two-dimensional, XY location) touch fabric sensor with only two electrodes (wires) to sense both planar touch and pressure, making it ideal for applications with limited space/complexity for wiring. The proposed knitted structure incorporates a supplementary method of sensing to detect human touch on the fabric surface, which offers advantages over previous methods of touch localization through an efficient use of wire connections and sensing materials. This structure is easily manufactured as a single component utilizing flatbed knitting techniques and electrically conductive yarns. The design requires no embedded electronics or solid components in the fabric, which allows the sensor to be flexible and resilient. This paper discusses the design, fabrication, sensing methods, and applications of the fabric sensor in robotics and human-machine interaction, smart garments, and wearables, as well as the highly transdisciplinary approach pursued in developing medical textiles and flexible embedded sensors.