A pencil is a kind of writing equipment that is also used to draw, usually on paper. Most pencil cores are made of graphite powder mixed with a clay binder. So, a pencil is usually made with a piece of graphite mixed with clay that has a wood case around it. The shape is usually a hexagonal prism but some pencils are square or cylinder.
Colored pencils are a kind that do not use greyish silver graphite. Instead, the core is colorful. Colored pencils or crayons are usually meant for drawing rather than writing.