YOur mistake in making char cloth is putting more than one hole in the can! The purpose of the hole is simply to let moisture( steam) out! You don't want air going in. If air gets in, the cloth burns up, and you get white ash inside! Multiple hoes makes it almost sure that you were getting oxygen into the can through some of the other holes, and that is why you failed.
Start with a new can and put just one small hole in the middle of the top. Always pack the can tighly with as much cloth as you can get into it and still close the can. A screwtop can works the best, for obvious reasons. The cloth packed tight displaces the most of air.
Charring cloth or wood( Yes, the charcoal brickets you use in the BBQ involves heating the material( cotton here) above its flashpoint, of the temperature at which will ignite, in an atmosphere deprived of oxygen. Since the material cannot burn without oxygen, it alters its state to lose its non carbon elements. What is left is opaque, that is, a black cloth that you can see daylight through slightly when you hold it up to the light. Using one hole, you can control steam going out, while stopping air going in. If the can gets too hot, it will shove the steam out so fast that oxygen will get in and you will get a blue flame coming out of the hole. Remove the can from the source of heat, cover the hole, and let it cool, before returning it to the heat to steam off the moisture in the cloth. When there is no more " white smoke" (Steam)visibly coming out of the hole, the cooking is done, and you can now cool down the can with a cover on the hole. When the can is cool enough to touch with bare hand, you can open it up.
There may be some cloth inside that is not fully charred. It will be a mixture of colors, from black to brown to whatever the color of the cloth was that you started with. You can either leave all the charred cloth and uncharred cloth in the can, close it up, and return it to the heat to finish it, or simply move the cloth that is fully charred to another container, and save the uncharred clothe for the next time you are going to char cloth. ( Wood takes much longer to char, and a higher heat, but the process is the same.)The cloth that is charred is black, and consists mainly of carbon fibers which do not hold water well. It will catch and hold a spark from your flint or magnesium fire starter, and become an increasing in diameter glowing ember if you blow on it. YOu will want to transfer this ember to some dry tinder to start a fire. Put the char cloth in your tinder, and hold it above your eyebrows. Blow upward on the bottom of the tinder so that when it flames up, it will not burn your hair or your eyebrows. You also don't want to take a lungful of smoke by blowing down at it. There are other ways to ignite fire with such glowing embers, but you can learn those after you master the basic technique. If you want to know more, you can PM me.