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The most useful function of tags is as a navigation tool for your users. Whenever you have a 'category' of information that is too specific for you to create an actual category, create a tag instead. I always say that categories are the branches of my navigation and tags are the leaves. For this reason, only create a tag if you can see yourself using that tag again on future posts.

I, however, have in fact had good experiences with relevant tags helping me in the SERPs as well. But, this hasn't been as a result of directly targeting keyphrases or anything like that. It has been as part of an overall picture of quality content, backlinks, meta tagging AND having relevant words in my permalinks. It's just one more weight that helps tip the balance in your favor.

Thoughtful and relevant tagging is definitely something you should do, but the positive effects will come as a side effect of just taking the "navigation leaves" approach when creating your tags. That's all you really need to do, and everything else will follow, so long as you are taking care of all the other parts of the picture as well.

You can get seo benefit from wordpress tags if you enable tag indexing. I usually use one or two tags on each post.

I also use one or two tags..but prefer one, and I make that tag the same as the category.. I don't know for sure does this improves SEO, but I've noticed better rankings when I do that

Yes to many tags can harm your site because having more keywords density on one page considers as spam.

Up to 7 tags max should be ok as long as they are not repeated in a single post.

This is interesting :rolleyes:

How many tags should I use per post? WordPress.com Forums

From my experience it is correct advice.