What does "fancy" mean here? Is it something like luxurious?
Native speaker’s answer
Rebecca
The speaker is guessing that Monica categorizes some of her towels as "fancy towels" and "fancy guest towels" (meaning "fancy" towels her guests use). "Fancy" here does mean "luxurious" or "elaborate". Ex: She wore a fancy dress out to dinner. Ex: The decorations in the mansion were fancy.