Good questions about what tags actually do. The search algorithim we use on Folksy does use tags (and also title and description) in determining relevancy. For your example @LizzieMade:
If someone searches for “picnic blanket” (and let’s assume for now these words are not in the title or description) then the item will show in in search if it has the “picnic blanket” OR “picnic” and “blanket”. However, “picnic blanket” will be prioritised over “picnic” and “blanket” (so would appear higher in the results, all things being equal).
However, it would probably be the case that you would also want to appear high for people searching for blanket too. In which case if you only had “picnic blanket”, someone who had tagged their work “blanket” would appear higher. Again, all things being equal and forgetting for now about title and description.
So, the question then is, should you use “picnic blanket” AND “picnic” and “blanket”. That would depend on how relevant your item was for those individual terms. Would someone searching for “picnic” be likely to think that your picnic blanket was relevant? If you think so, then it may be worth having it as a separate tag. It may also be that the number of items on Folksy that come up for “picnic” is low, so you would rank highly anyway with “picnic blanket” and it’s not worth haveing a separate tag for “blanket”.
The search algorithim also uses title and description fields too and so whilst tags are significant you should also think about clear and concise titles and well described (think of describing the item to someone who cannot see the photos!) description fields.
Hope this helps. We’ll write up a blog post to be clearer and also provide a Knowledge Base article in support too in the next few days.
James.