According to Wikipedia a Folksonomy is a the practice of collaborative categorization using freely chosen keywords. Folksonomies offer an alternative to classification using ontologies that is more flexible and scalable and is therefore well suited for collaborative categorization by non-professionals.
Although ontologies are widely used to classify the information we posses about world, they are not flawless. Some people think that in the context of the Web the very purpose of ontologies (classifying objects into classes) is flawed. Clay Shirky has a recent interview on ITConversations entitled “Ontology is Overrated” on the topic. In my view everyone attempting to build a general ontology runs into a major problem: some concepts can be classified in different ways according to the expected use. Is Australia a continent, a country or a rugby team? No matter which of the classes is chosen there will be some users that will find the classification arbitrary. This is one reason why directory services (not only tools like LDAP, but also web directories like ODP and even file systems) offer the possibility to add aliases (symbolic links) between related categories that are part of different subtrees. While this could solve the classification problem in many of the cases, the amount of links that one has to add can be restrictive.
What the folksonomies do is completely renounce to the hierarchical relations. Metadata is attached instead to each object in the form of tags (labels). A major advantage is that an object can have an arbitrarily large number of tags. Related tags can be determined automatically and used to increase the accuracy of the searches. Moreover these tags are added by the users themselves and not by experts. So it is the users that create metadata for their own individual use that is also shared throughout a community. Two such communities are Delicious and Flickr. Delicious allows users to store and share bookmarks while Flickr does the same thing for photos. Because the users can add any tags they like this is a very flexible way for users to organize their information. But things don’t stop here because the real power of folksonomies comes in when the supporting community grows large enough. Not only the categorization is usually comparable to that made by experts but the resulting system is much flexible and the advanced search capabilities are almost limitless. Although folksonomies are just beginning to become popular at this time, the idea behind them is very simple and interesting. They surely deserve further investigation.
For a more in-depth introduction to Folksonomies Adam Mathes has a very interesting article entitled “Folksonomies – Cooperative Classification and Communication Through Shared Metadata“.