My question is " How to know if a woman is aroused?" Or is she just faking it??

There is no way to tell. You just have to trust that the person is really feeling pleasure.

If you're talking arousal you could looking for clues like nipple hardening (although not all women have this reaction) and obviously getting wet.
However if it's an orgasm you're talking about then you'd just have to hope the lady in your life is honest with you. Make her feel comfortable enough to not have to fake it, then you know you're really doing something right when she does moan!

A lot of men have this misconception that women fake an orgasm just to make you happy. In actual fact I doubt many women do this as it just gives you false confidence. However, some women have discovered that faking an orgasm is a great way to have one. Hearing yourself moan and going through the actions is a big turn on itself and can trigger an orgasm itself.
Listen to a girls breathing, if she can't catch her breath then she's enjoying it. Moaning etc also gives it away. But if your in any doubt trya bit harder, just to be sure. Lol

Most women's genitalia swell a little when they are fully aroused. Of course you have to know what their normal state is for them to judge that, also some women get quite wet, some far more than others, there are other clues as well as EnglishRose has described. You really look for multiple things. However women who are comfortable with you typically let you know in ways that are impossible to miss.