A Guide to Tags and Tagging
Modern websites and blogs often provide a feature called a 'Tag Cloud'. It contains a series of words that are common across the site and sized according to how many times they are used. Larger words are more common, smaller ones less so.

When people initially start tagging they tend to use the wrong words and overuse the tags system to relate items together. This leads to a tag cloud that isn't as useful as it could be.
What are Tags used for?
Tags are used to highlight items and references across all types of content on a site. If I have a page that talks about bananas and an event about bananas, I would tag them as 'Fruit'. You may think that 'Banana' would be the right tag but that will be very unlikely to appear in the cloud unless you're a banana wholesaler.

When a user comes across an item about bananas they may wish to see what other fruit items you have on your site. The tags will let them instantly find fruit related material without having to search for Apple, Orange, Strawberry etc.

A tag should loosely relate to the subject matter so you can relate items that have a similar theme. Tags should allow a user to hit a page and follow that pages theme to your other content (Keeping them on your site).

Sometimes you may wish to use more specific tags and this is fine if you have many items with that tag. If you're site covers growing fruit and vegetables you probably have enough to content on 'greenhouses' or 'compost' to make these their own tags.

An item will usually have a couple of tags so that the user can follow the topic of the article. With our fruit example an article about the best compost for bananas would have the tags 'Fruit,Growing' not 'Banana,Compost' so the user could then follow the article to other items that cover growing fruit. If we had used 'Banana,Compost' they would not have taken us to 'Strawberry Tubs (Tags: Fruit,Growing)' or 'Greenhouse Heater (Tags: Growing)'

Try to keep the number of tags as small and relevant as possible. 2-4 is a good target.

Common Mistakes
Tags are not categories.
It can seem like a good idea to tag all news items with 'News' or all events with 'Event'. This will lead to news and events being HUGE in the tag cloud and clicking on them will bring up a large list of all events on the site. News, Events, Pages or Articles are all types of content(categories), they should not be tagged.

If your site is about music you think that tagging every article with 'Music' will help, it won't. You should consider using the following type of tags instead:

'Classical, Rock, Jazz, 60s, 70s, 80s'

and not more specific ones like:

'Neo-Classical, 80s Pop, 83,74'
Looking after your tags
Every so often you should look at your tags and gather up all those items that only have a couple of references. Using the fruit example above we may have 40 items with with 'Growing' but only 2 with 'Compost' so we should change the 'Compost' tag to 'Growing'.
If a tag only has a couple of item but is relevant, then leave it as it is. Say we have 2 items with 'Vegetables' but that is correct to those items, we can leave those alone.