Gray wool is used to make gray carpet, gray bed and gray banners.
To make Gray Wool, you just need two things, Sheep Wool and Squid for Ink Sac. Please follow the following steps to make Black Wool.
In order to make gray wool, you will have to find sheep and get at least one wool out of her. But don’t kill sheep, just use shears to get the wool.
The next item that you will have to get is skeleton bone. You will need to find and kill at least one skeleton to get the bone.
Ink Sac From Squid
After that, you have to find and kill squid to get ink sac. You will find them under the water, use your iron sword to kill squid to get at least one ink sac.
Make your way to the crafting table to add skeleton bone in any cell of the 3*3 crafting grid. You will get bone meal in the right-side box of the crafting table. Add the bone meal into your inventory to use it in making the gray dye.
Now you need to make Gray Dye by using the crafting table. Add bone meal and ink sac in adjacent cells of any row or column. You will get Gray Dyes in the right-side box of the crafting table. Add them in your inventory to use later.
After that you need to craft Gray wool by adding 6 wool and 6 gray dyes in in adjacent cells of any row of 3*3 crafting grid, as shown in the image below. You will get six Gray wool in the right-side box of the crafting table. Add these into your inventory to use later.