What is a Taxonomy in WordPress?

Taxonomy is a term that refers to the grouping of posts and custom posts that have similar qualities. In WordPress, there are four basic taxonomies,

1. Catagory
2. Tag
3. Link_category
4. Post format

What is the significance of this?

They're necessary because introducing taxonomies allows you to categorize and tag content depending on their characteristics, providing your visitors with the information they need.

Taxonomy in WordPress is one of those things that everyone use, but they do not know that they are using it. Derived from the biological classification method Linnaean taxonomy, WordPress taxonomies are used as a way to group posts and custom post types together. ... You can register a new custom taxonomy called Topics.