The use of “real word” categories to organize content in a way that is more in line with the way that real people understand it.

A collaborative sorting scheme used in many Web 2.0 web services.

When a robot comes from the future to save us from our inevitable self-destruction, this is the technology that will likely be touted as the beginning of the end.

Other Definitions

Wikipedia,

A tag is a (relevant) keyword or term associated with or assigned to a piece of information (a picture, a geographic map, a blog entry, a video clip etc.), thus describing the item and enabling keyword-based classification and search of information.

Dictionary.com,

A label associated with something for the purpose of identification; “semantic tags were attached in order to identify different meanings of the word”

Citations

How To Pick Wordpress Plugins,

Tags are vastly easier to deal with than categories, and UTW makes tagging fun and easy. Just plug it in, fiddle with a few options and the next thing that you know you are a tagging machine. This will help you drive some of Technorai traffic your way (regardless of how useless I think it is these days), and it will make it easier for users to navigate your site. It’s definitely a must have.

How To Search Web 3.0,

In Web 3.0 search engines will need to have a better understanding of “context”. One way to accomplish this is to take a nod from directories and allow results to be tagged. These tags can be voted on by the community and would only be an addition to, not a replacement for, traditional sorting algorithms. Thus, if an eCommerce site is tagged as being a source for information on “iPods”, the community has validated this with their votes and the algorithm acknowledges that this is true, it would appear high on the listing for searches within the context “iPod”

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