From Seo Wiki - Search Engine Optimization and Programming Languages
A folksonomy is a system of classification derived from the practice and method of collaboratively creating and managing tags to annotate and categorize content; this practice is also known as collaborative tagging, social classification, social indexing, and social tagging. Folksonomy is a portmanteau of folk and taxonomy.
Folksonomies became popular on the Web around 2004 as part of social software applications such as social bookmarking and photograph annotation. Tagging, which is characteristic of Web 2.0 services, allows users to collectively classify and find information. Some websites include tag clouds as a way to visualize tags in a folksonomy.
Attempts have been made to characterize folksonomy in social tagging system as emergent externalization of knowledge structures contributed by multiple users. Models of collaborative tagging have been developed to characterize how knowledge structures could arise and be useful to other users, even when there is a lack of top-down mediation (which is believed to be an important feature because they do not need laborious explicit representations as in semantic web). In particular, cognitive models  of collaborative tagging can highlight how differences in internal knowledge structures of multiple users can lead to different emergent properties in the folksonomy of a social tagging system.
An empirical analysis of the complex dynamics of tagging systems, published in 2007, has shown that consensus around stable distributions and shared vocabularies does emerge, even in the absence of a central controlled vocabulary.