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Great question Alan. Tags in crowd.loc.gov are an experimental feature and we're excited to see how members of our community will use them. Some people might like to use tags to identify people, places, or things in documents that are not already in the item's description on loc.gov. Others might like to tag things of particular to their students or class, research, hobbies, or as a way of searching through the items they've transcribed. We're working to implement tag search as a feature within crowd.loc.gov.
We also want to understand if tags can someday be included in the metadata describing items in the Library catalog. Your tags could help make items discoverable if you use search terms that are not present in the Library's existing metadata or the transcriptions we will produce on crowd.loc.gov. Another word for this kind of tagging is a "folksonomy".
"Folksonomy": I just learned a new word!