Wordpress tag cloud updating
If you want to create a taxonomy like categories where you can add a parent and child term then choose True, other wise choose false if you want terms to be added like tags.Third option is to associate this taxonomy with a post type and last option is whether or not you want to add terms automatically, choose none. Lets assume that you are creating a taxonomy and calling it Topics.
Taxonomy in Word Press is one of those things that everyone use, but they do not know that they are using it.
Go to Settings » Custom Taxonomies to create a new taxonomy: The first part of creating a custom taxonomy is giving it a name, which needs to be all lowercase and no weird characters.
The second option is whether or not this taxonomy will be hierarchical.
While the new tagging feature in 2.3 is a great addition, the wp_tag_cloud tag can be used to display a Tag Archive.
What this means is that when a visitor clicks on any particular tag a page displaying the tag cloud and all posts tagged the same will be displayed.