[QUOTE=DWFII;656222]Thanks! Am I correct in assuming that it is actually cut a bit bigger and the edges folded under?

I have several military tams, and none of them are turned under. They are sewn quite well--with tight stitches--all around and allowed to fray a wee bit at the edges.

Do you have it sewn to your Tam O' Shanter (TOS) on three sides to allow for a sprig to be inserted?

Mine are all sewn on all four sides. The tam I own from the Royal Highland Fusiliers with the white hackle seems to be sewn pretty much right up to and over the wire.
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You can check here for some premade regimental tartan backers: http://onlinemilitaria.net/shopexd.asp?id=1759&bc=no (You'll have to pull down the list to see what all is available.)

If you just want something non-regimental in your own tartan, just cut it out such that you show all the stripes well and sew it on.