Rope is one of three kinds tying equipment available in UrW, the others being cord and withe. Rope can be crafted from 1 lb of leather, 1 lb of water (or standing near a water source), and requires a cutting tool (preferably a knife). Many crafting recipes which require rope can use cord; the only unique things rope is used for is leashing animals and for making a raft. When you purchase an animal, you will receive a free rope with which to leash it.
In the crafting menu it is in the utilities section with the name "leather rope".