Decoration adds to the aesthetic qualities of knives and swords and is central in both appreciation and study by collectors.  The fundamental methods are:

It is easy to become confused by the names and different techniques which tend to overlap or are otherwise used differently in various regions.  

Glossary of Hand-Engraving Terminology

More information about inlaying, engraving, filigree and cloisonné

Koftgiri has at least three different types, one of which is an inlay and the other two more properly classified as overlay or onlay.

Damascene, like Koftgiri, has both inlay and onlay varieties.

For an excellent overview of these techniques, see also:  Techniques of Decoration on Arms and Armor from the Metropolitan Museum of Art

Also, see the the following discussion on the Ethnographic Arms & Armour Forum: 
Inlay, koftgari, repousse, chasing and neillo