There's a module for that! Drupal architecture and module development

The taxonomy system is one of the great contributions of Drupal to the technology of CMS: the ability to classify content with multiple vocabularies. Each vocabulary represents a dimension of concern in the content being managed. Further, a single taxonomy has a flexible structure: it can be linear, tree-like, even graph-like when multiple parents are chosen. Content can be restricted to be tagged with a single term, or multiple terms can be allowed. Finally, freetagging is supported.