I bought these little chaps when on holiday in Madeira a few years ago:

They are only about an inch high, and definately handmade although I'm not sure how! They almost look like they have been stitched then cut out but as you can see, the arms are tiny! I feel a challenge coming on....

Madeira produces some amazing embroidery. The work is done by ladies in their homes to a very high standard but alas the art is dying out. The book is to be recommended (I have it!). I will post some details from it in another post.To see more about Maderian embroidery visit:

Bordal's embroidery