手ぬぐい (tenugui) means “hand towel”

More examples

旅行のお土産に、手ぬぐいを一枚買いました。ryo kō no o miyage ni te nu gu i o ichi mai ka i ma shi ta

I bought a hand towel as a souvenir from my trip.

A thin, portable cloth absorbs moisture from the hands and serves as a simple hand towel.

手拭きtefuki: A cloth used to wipe the hands.
タオルtaoru: A soft cloth that absorbs water and is used for drying people or objects.

手をふくために用いる細長い布。te o fu ku ta me ni mochi i ru hoso naga i nuno

手ぬぐい (tenugui) combines 手 (te, "hand") and 拭い (nugui, "wiping"), referring to a cloth for wiping the hands.

In Japan, a 手ぬぐい (tenugui) can also serve as a wrapping cloth or head covering, so hand towel does not describe all of its everyday uses.