To fully understand folklore, it is helpful to clarify its component parts: the terms folk and lore. It is well-documented that the term was coined in 1845 by the Englishman William Thoms. He fabricated it to replace the contemporary terminology of "popular antiquities" or "popular literature". The second half of the compound word, lore, proves easier to define as its meaning has stayed relatively stable over the last two centuries. Coming from Old English lār 'instruction,' and with German and Dutch cognates, it is the knowledge and traditions of a particular group, frequently passed along by word of mouth.
The concept of folk proves somewhat more elusive. When Thoms first created this term, folk applied only to rural, frequently poor and illiterate peasants. A more modern definition of folk is a social group which includes two or more persons with common traits, who express their shared identity through distinctive traditions. "Folk is a flexible concept which can refer to a nation as in American folklore or to a single family." This expanded social definition of folk supports a broader view of the material, i.e. the lore, considered to be folklore artifacts. These now include all "things people make with words (verbal lore), things they make with their hands (material lore), and things they make with their actions (customary lore)". Folklore is no longer circumscribed as being chronologically old or obsolete. The folklorist studies the traditional artifacts of a social group and how they are transmitted.
Transmission is a vital part of the folklore process. Without communicating these beliefs and customs within the group over space and time, they would become cultural shards relegated to cultural archaeologists. For folklore is also a verb. These folk artifacts continue to be passed along informally, as a rule anonymously and always in multiple variants. The folk group is not individualistic, it is community-based and nurtures its lore in community. "As new groups emerge, new folklore is created… surfers, motorcyclists, computer programmers". In direct contrast to high culture, where any single work of a named artist is protected by copyright law, folklore is a function of shared identity within the social group.
Having identified folk artifacts, the professional folklorist strives to understand the significance of these beliefs, customs and objects for the group. For these cultural units would not be passed along unless they had some continued relevance within the group. That meaning can however shift and morph. So Halloween of the 21st century is not the All Hallows' Eve of the Middle Ages, and even gives rise to its own set of urban legends independent of the historical celebration. The cleansing rituals of Orthodox Judaism were originally good public health in a land with little water; now these customs signify identification as an Orthodox Jew. Compare this to brushing your teeth, also transmitted within a group, which remains a practical hygiene and health issue and does not rise to the level of a group-defining tradition. For tradition is initially remembered behavior. Once it loses its practical purpose, there is no reason for further transmission unless it has been imbued with meaning beyond the initial practicality of the action. This meaning is at the core of folkloristics, the study of folklore.
With an increasingly theoretical sophistication of the social sciences, it has become evident that folklore is a naturally occurring and necessary component of any social group, it is indeed all around us. It does not have to be old or antiquated. It continues to be created, transmitted and in any group is used to differentiate between "us" and "them".