Taxonomy is Drupal’s system for classifying content with tags and categories. You create vocabularies, which are groups of terms, and then attach those terms to content through entity reference fields.
For example, a blog site might have a Categories vocabulary with terms like Technology, Business, and Design. Articles use a taxonomy reference field to link to one or more of these terms.
Taxonomy terms are full entities with their own fields, so you can add images, descriptions, and any other data. They also support hierarchy, which is useful for nested structures. Terms can be displayed as pages, listed on other pages, or used to filter Views. The taxonomy system is one of Drupal’s most flexible features and underpins many common site patterns like tag clouds, faceted search, and content classification.