A taxonomy is a collection of all the labels applied to the verbatims in a dataset, structured in a hierarchical manner.
Labels are structured in a tree structure, with parent (or root) labels having branch and sub (or leaf) labels nested beneath them, as shown below. Each level of the hierarchy represents a sub-set of the level above.
Snapshot of a taxonomy analysing hotel reviews data
Once complete, a taxonomy should contain all the concepts and intents you want to capture in the dataset to suit your specific objectives.