Liz Edols has written a great introductory article on what exactly are Taxonomies?
…’structures that provide a way of classifying things – living organisms, products, books – into a series of hierarchical groups to make them easier to identify, study, or locate.
Taxonomies consist of two parts – structures and applications. Structures consist of the categories (or terms) themselves and the relationships that link them together. Applications are the navigation tools available to help users find information.’
– A cited Reference from Jean Graef’s, Managing taxonomies strategically.