A wiki is a type of computer software that allows users to easily create, edit and link web pages. The main power of wikis are enabling users to collaborate in creating content.
A wiki enables documents to be written collaboratively, in a simple markup language using a web browser. A single page in a wiki is referred to as a "wiki page", while the entire collection of pages, which are usually well interconnected by hyperlinks, is "the wiki". A wiki is essentially a database for creating, browsing, and searching through information.
A defining characteristic of wiki technology is the ease with which pages can be created and updated. Generally, there is no review before modifications are accepted. Many wikis are open to alteration by the general public without requiring them to register user accounts.
Sometimes logging in for a session is recommended, to create a "wiki-signature" cookie for signing edits automatically. Many edits, however, can be made in real-time and appear almost instantly online. This can facilitate abuse of the system. Private wiki servers require user authentication to edit pages, and sometimes even to read them. (from Wikipedia)
Pros
Convenient and easy to edit
Information is not lost when edited
Easy to undo mistakes
Allows multiple people to contribute
Permits information to evolve over time
Relatively safe to give many people access
Easy to cross-reference pages
Cons
Can lead to a sense of chaos - no-one is in charge
Potential for conflict between users
Potential for malicious tampering with pages
Difficult to verify information - can lead to unintended inaccuracies
Case Studies
Wikipedia is perhaps the best-known wiki site. The name comes from a combination of "wiki" and "encyclopedia." Wikipedia is one of the web's largest reference sites, hosting over 9,000,000 articles edited by over 75,000 active members.
Useful reading material
Wikipatterns by Stewart Mader -- just published, flamin' brilliant!