I wrote about the topic of folksonomy back in 2006. The word joins folk + taxonomy and refers to the collaborative but informal way in which information is being categorized on the web.
As users, usually voluntarily, assign keywords or "tags" (from hashtags) to images, posts or data, a folksonomy emerges. These things are found on sites that share photographs, personal libraries, bookmarks, social media and blogs which often allow tags for each entry.
Taxonomy is a more familiar and very formal process. You are probably familiar with scientific classifications and might have studied the taxonomy of organisms. Remember learning about Domain, Kingdom, Phylum, Class, Order, Family, Genus, and Species? As an avid gardener, i encounter the taxonomy of plants regularly.
There are taxonomies that are not considered "scientific" because they include sociological factors. In academia, many of us know Bloom's Taxonomy - the classification of educational objectives and the theory of mastery learning.
Non-scientific classification systems are referred to as folk taxonomies, but the academic community does not always accept folksonomy into either area. In fact, some who support scientific taxonomies have dubbed folksonomies as fauxonomies.
Others see folksonomy as a part of the path to creating a semantic web. It's a web that contains computer-readable metadata that describes its content. This metadata (tags) allows for precision searching.
If you have ever tried to get a group of readers or graders to agree on how to evaluate writing using a rubric, you might understand how hard it would be to get the creators of web content tag content in a consistent and reliable way.
Some examples of standards for tagging include Dublin Core and the RSS file format used for blogs and podcasts. All of this really grew out of the use of XML. Extensible Markup Language (XML) is a general-purpose markup language (as is HTML) that was at least partially created to facilitate the sharing of data across different systems, particularly systems connected via the Internet.
Folksonomies do have advantages. They are user-generated and therefore easy (inexpensive) to implement. Metadata in a folksonomy (for example, the photo tags on Flickr.com) comes from individuals interacting with content not administrators at a distance. This type of taxonomy conveys information about the people who create the tags and a kind of user community portrait may emerge. Some sites allow you to then link to other content from like-minded taggers. (We have similar taste in photos or music, so let's check out each others links.) Users become engaged.
There are problems: idiosyncratic tagging actually makes searches LESS precise. Some people post items and add many hashtags in the hopes of having their content found in a search on that tag. They may even add irrelevant tags for that reason. Tagging your post with the names of currently popular people or adding "free, nude, realestate, vacations" even though none of those are relevant to your content might cause someone searching for those things to find your content - but that person is likely to be unhappy at landing at your place.