WordPress taxonomies might sounds strange but in general it is nothing more than the ability to group posts together by some sort of logical meaning. By default, WordPress core comes with couple predefined taxonomies: categories and tags.
There are two types of taxonomies. The hierarchical taxonomies works like “folders” that can be organized in the tree. For example post category is the hierarchical taxonomy and you have the ability to select parent category.
The non-hierarchical taxonomies are tags and their structure is linear. You can only assign a plain list of tags to your posts.
Any plugin or them can register custom taxonomy with register_taxonomy function that will be related to already existing post type. This is important to know that taxonomies cannot exist independently. They are always linked to existing post type.
WordPress does not offer any options to manage access to taxonomies and this is where AAM plugin is very useful however this feature is available only with premium Plus Package extension. For more information about managing access to taxonomies, check the How to manage access to the WordPress content article.