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My mom used to make smocked dresses for us when we were little girls. I think there's even a funny story about her writing a note to my aunt and my cousin reading it shocked that her aunt had taken up smoking (smoking/smocking - looks and seems to sound the same when your a kid.)
I remember her having some type of machine to create the smocked material, but I think this handmade version looks fun to try especially for something like pillows or a bag.