Texture problems

While this was rendering I was surfing the internet and saw a picture of another video game character that was being rendered in real time. I noticed that the cloth on his clothing had a rich texture and it appeared that the model consisted of individual fibers, which I knew wasn’t true. My question is how to make a texture affect where it shades and highlights I remember see that to the far right of the materials menu there is drop down menu in which you can pull up how to apply an image texture without UV mapping it but the only use I got out of it was how to make an object have a transparent texture.