Taxonomies are different methods for classifying things. Prior to version 2.3, WordPress had only one generic taxonomy, called Category, for Posts. Version 2.3 of WordPress added another type of taxonomy called Tags. While categories are usually thought out in advance, specific to the types of content on a site, tags provide a more freeform, impromptu method of classifying content. WordPress version 2.8 made it possible to add custom classification schemes with just a few changes to the code on your site. It did not, however, allow these custom taxonomies to be built in a hierarchy similar to the generic categories taxonomy.Finally, WordPress version 3 gives us fully hierarchical custom taxonomies.
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