Why should authors care about tags? Because tags are an important new way for readers to discover your books. Tagging is an individual activity with global utility. Each of the 3.5 million books in Amazon's catalog could be assigned its own unique "category" yet reside in thousands of other categories at the same time.
Amazon added its tagging feature in 2005, and made it more prominent--higher on book detail pages--than its traditional category lists. Amazon tags are publicly viewable unless users designate them as private. You can manage your tags through a #Your Tags# field at the bottom of every Amazon page.
Authors and publishers can increase the visibility of their books by adding the obvious keywords appropriate to their book. Amazon tags are indexed by Google and other search engines.
As more book readers begin tagging, finding niche content will become easier than ever. Tags assigned to obscure books will be rare but instantly apparent. A few common tags will be used by huge numbers of users and visible to everyone: The five most-used tags on Amazon are DVD, music, books, fantasy and anime. Most tags, including the more useful ones, will be seldom used, such as bizarre apocalpytacism, Amazon's least-used tag. Many tags will be used by just a few people, perhaps assigned to only one book, enabling a niche of one.
As a reader, here are some ways you could use tags on Amazon: