yes, melted wax makes a area on the cloth that resist the water dye.. and later the wax is washed out..

batik is interesting, since it is dependant on cold water dyes..most dyes use mordants (any number of a various chemicals that help "open" the fiber to dye) and hot water. even wools are commonly dyed in hot water (modern "recipes" for home dyed wool, include vinegar(the mordant) kool-ade, (for dying) and microwaves (for heat!)

the developement of cold water dyes allows for batiks..(i don't know exactly which south east asian country first developed them, and details about the mordants.. but they are a different dying process to the common 'vegetable' dyes used in Mediteranian area, (including near east)

its not hot water alone the shrinks wool, but a combination of hot water and aggitation.. so microwave ovens give you fast hot heat, and no movement (since the wool is often steamed, not boiled)