Why is the cloth flannel called flannel?
One theory is that it a borrowing from Welsh gwlanen, 'flannel', which according to the OED is < gwlân, 'wool' (the traditional material for making flannel) and before that < Old Celtic *wlanā.
Wiktionary, on the other hand, suggests it was borrowed into Middle English from Anglo-Norman flanelle, 'wool', ultimately via Gaulish from the same Old Celtic root *wlanā. This in turn would have come from a Proto-Indo-European root *wele-.
Either way a Celtic origin seems quite likely and of course it's possible both these origins, the Welsh and the Anglo-Norman, might have influenced the Middle English word, flaunneol. Here's a quote from c. 1300 I found in the Middle English Compendium
Flaunneol & bursas
This is earlier than the first quotation given in the OED. I believe Bursas refers to traditional fabrics, silk, velvet and the like, from Bursa in Turkey.
The same PIE root is also thought to be the origin of wool, < Old English wull, < Proto Germanic *wullō. There are a host of related words in different Indo-European languages, Two interesting ones are Greek lenos, which I'm guessing was wlenos in Archaic Greek, before Greel lost the /w/ consonant, and the doublet lana 'wool' and vellus 'fleece' in Latin.