any taxonomy guide for dummies?

Think of the taxonomy bits as general purpose ways of organising stuff. They don't have any one fixed purpose, they are just a bunch of features that modules can work with to fit around your way of organising stuff. Different modules might (or might not) use them in different ways. It just a common organisation approach in Drupal that modules can take advantage of. And you don't actually have to use them at all if you don't want to.

You can create different categories using many flexible structures.

The base unit in the taxonomies is a 'term'. Think of a 'term' as a single category label. Nodes in Drupal can be tagged with multiple terms eg a bit like tagging them with metadata. What that means or how the terms get used isn't really defined by the taxonomy stuff itself - it is up to modules (and you) to decide how they get used.

A 'vocabulary' is a collection of related 'terms'. There can be relationships defined between terms eg using hierarchies, related terms, synonyms etc. But don't worry too much about that yet. At first just think of vocabularies as simple collections of terms. You can have multiple vocabularies for when you need multiple independent collections - or in more technical terms when you have orthogonal concepts that are a bit like different dimensions on a graph etc.

As an example of these orthogonal/independent concepts a knowledge base site might be full of a vast mass of articles. The site categorises these articles along the lines of 'Purpose', 'Subject' and 'Audience'. These three examples are independent concepts and each article could be categorised along those lines. Each of the three would become Drupal 'vocabularies' and the actual categories in them would be Drupal 'terms'. eg the Purpose vocab could have terms like 'FAQ', 'Tutorial', 'Reference', 'Background Concept' etc. Subject could have terms like 'Networking', 'Graphics', 'File Systems' etc. And Audience could have terms like 'Programmer', 'User', 'Sysadmin' etc.

eg an article explaining how to configure a DNS server could be tagged with the terms: Tutorial, Networking, and Sysadmin. The sites navigation could then easily provide ways for users to browse these categories in different way depending on what they are looking for - eg user could look through a list of Tutorials or a list of articles about Graphics or articles aimed at Programmers etc.

You can then start creating hierarchies of terms within a vocabulary to allow you to create parent and child type terms eg a term called 'mammals' might have child terms like 'primates' or 'canines' etc.

But I would recommend just starting off with simple examples - eg one or two vocabularies each with a flat list of terms in them (no hierarchies yet). Then work your way up from there as your needs grow and you understand them better. The majority of sites will never really need the more advanced taxonomy bits (eg multiple hierarchies, related terms etc) - they are just there for the more ambitious sites.

Hope that helps a bit. Just start playing around a bit with them. Just think 'general prupose organisation' at this stage and don't get too hung up on specific uses until you have a feel for them.

--
Anton

I know this is a way old thread but I just posted a guide to Drupal Taxonomy with a glossary and example on Tumblr:

http://user37.tumblr.com/post/1406578543/drupal-taxonomy-explained

Here is the gist of it

Taxonomy is created from ‘Vocabularies’ that contain related ‘Terms’. A Drupal site can have an unlimited number of vocabularies each containing an unlimited number of terms. Vocabularies can be applied to any number of different content types, can be restricted to certain predefined terms and also can be mandatory.

Glossary of Drupal Taxonomy

Vocabulary
A collection of terms

Term / Tag
A single entry into a vocabulary - the word tag is more commonly used to describe a term without hierarchy.

Controlled vocabulary
Terms within the vocabulary are defined and additions are restricted.

Free tagging / Folksonomy
The ability for users to add new terms to a vocabulary - allows users to collectively classify and find information.

Hierarchy
Within a vocabulary terms can exist in sub-categories (up to 7 deep) to provide further classification.

Synonym
Two or more terms can be interchangeable or linked so they act as one. This reduces errors with duplication, we can consider the terms: Health and Safety; Health & Safety; and healthandsafety as one term.