A colored pencil, coloured pencil (see spelling differences) or pencil crayon is an art medium constructed of a narrow, pigmented core encased in a wooden cylindrical case. Unlike graphite and charcoal pencils, colored pencils’ cores are wax- or oil-based and contain varying proportions of pigments, additives, and binding agents. Water-soluble (watercolor) pencils and pastel pencils are also manufactured as well as colored leads for mechanical pencils. (source)