From Wikipedia

Tags are usually chosen informally and personally by the author/creator or the consumer of the item. Tags are typically used for resources such as computer files, web pages, digital images, and bookmarks (both in Social Bookmark services, and in the current generation of web browsers - see Flock). For this reason, "tagging" has become associated with the Web 2.0 buzz. Many people associate "tagging" with the idea of the semantic web, however some believe that tagging may not be having a positive effect on the overall drive towards the semantic web.

Why Tags and not Folders?

I believe metadata / folder is dead – we are just not ready to accept it. Think about our education pattern – from very beginning we start to categorize ‘objects’ into different boxes. We focus on the ‘box’ rather than a pattern matching and relationship of the objects. In KM Asia Dave Snowden illustrated this point by asking the audience to do a simple ‘odd man out’ from ‘Cow, Chicken and Grass’. Most of the audience took out grass from the list, because that is the only vegetable in the list. This is categorization, putting things into boxes – folders or metadata, whatever you call it. Now if we look from another perspective – Cow eats Grass, so Chicken is the odd man out – that’s pattern matching – tagging – where I have the flexibility to define the perspective itself.

Problems with folders and metadata – that’s a closed system, somebody else define the taxonomy. Theory of entropy proves itself when the closed system of folders and metadata goes into a complete chaotic mode.

Tag Cloud

A tag cloud (or weighted list in visual design) is a visual depiction of content tags used on a website. Often, more frequently used tags are depicted in a larger font or otherwise emphasized, while the displayed order is generally alphabetical. Thus both finding a tag by alphabet and by popularity is possible. Selecting a single tag within a tag cloud will generally lead to a collection of items that are associated with that tag.

A tag cloud with terms related to Web 2.0