Krautrock is essentially a British term, coined to describe the wave of 70's prog rock coming out of Germany, including such bands as Faust, Can, Amon Duul, Popol Vuh, Neu! and Ash Ra Tempel
Think moody prog rock, post-psychedelic jamming mixed with atonal classical a la Karlheinz Stockhausen and you pretty much have it.
There was still rock and roll as it's base, of course, but these artists distanced themselves from the blues origin of their American counterparts. Krautrock also had ambient charactersitics plus the 'motorik' 4/4 beat
In many ways Krautrock was the German version of the Canterbury prog movement in the Uk (eg: Soft Machine) and 'froguerock'which came much later in the 1990's
Krautrock has had a massive influence on contemporary music; the post-rock of Mogwai, Tortoise and even Radiohead can all be traced back to their ambient psychedelia
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