Taxonomy versus Ontology
As people begin to get deeper into knowledge management and semantic webs, they start to talk about taxonomies and ontologies, sometimes as if the two were synonyms.
Put simply, an ontology is a specification of the characteristics of a domain. In other words, precisely what it mean for something to be in a particular domain.
A taxonomy is simply a hierarchical categorization or classification of entities within a domain.
For example, when people talk about clustering of search results, they are actually talking about arranging search results in a taxonomy, where that taxonomy is determined by the ontological characteristics of each search result.
Another way of looking at it is that an ontology is the set of all possible characteristics of the entities in a domain and a taxonomy is simply grouping of subsets of the domain based on common characteristics that have been chosen for the particular taxonomy.
Note that there isn't a strict one-to-one relationships between the ontology of a domain and a taxonomy. There may be any number of taxonomies for a domain (or ontology), based on any number of chosen subsets of ontological characteristics.