Tag Cloud Question

[Walalayo]

I wanted to put a tag cloud on my WP blog, but am a little confused. There are different places to enter tags, including on the post page. Does a tag cloud work by itself to pull words out of a post depending on usage, or does it work using the tags that I enter for a post? I tried putting on on my page after making just one post, first without entering tags, then after entering tags, but the Tag area remained empty.

Can anyone help?