The actual word “hashtag” refers to the # symbol, also sometimes called the “pound symbol.” In a slang sense, a hashtag refers to the # as it’s used on Twitter and in Tweets.
According to Twiiter itself, “The # symbol, called a hashtag, is used to mark keywords or topics in a Tweet. It was created organically by Twitter users as a way to categorize messages.”
If you use a hashtag before a word or phrase, it allows that grouping to become known as a “hashtag” (the whole phrase with # + the word(s) is collectively known as “a hashtag” as well as the symbol itself). A hashtag becomes identifiable throughout Twitter, allowing tweets using the same hashtags to be easily identified together, searchable, and easier to find.
When many many tweets all use the same hashtag, it can create a trending topic – a specific topic of tweets that’s very popular at any given time.
During TV shows, for example, oftentimes a hashtag for the show will appear on the bottom corner of the TV screen. If viewers were to tweet about the show and include the hashtag – all of the tweets on the show would be electronically routed together on Twitter – and thus the entire conversation is easy to track and follow. (You can just use the same hashtag then to see what others are tweeting about the show).
People often invent silly or funny hashtags to describe a situation, even though they may be one of the only people using it. It’s sort of a Twitter inside joke to try and make a hashtag out of an expression or phrase.
Some commonly used hashtags are very well-known, like “#FF” for example, which means “Follow Friday.” On “Follow Friday” people use the #FF hashtag and then tag other Twitter users they follow. It’s a fun way to give shout outs to your friends, or to let someone know you’re following his or her Twitter account. It can help followers feel appreciated and gain recognition. It’s just a fun thing to do.
The Twitter Help Center has an entire section on hashtags that’s quite helpful – so for more information or for help in the future, make sure to check that out.