Folklore is the traditional art, literature, knowledge, and practice that is disseminated largely through oral communication and behavioral example. Every group with a sense of its own identity shares, as a central part of that identity, folk traditions–the things that people traditionally believe (planting practices, family traditions, and other elements of worldview), do (dance, make music, sew clothing), know (how to build an irrigation dam, how to nurse an ailment, how to prepare barbecue), make (architecture, art, craft), andsay (personal experience stories, riddles, song lyrics). As these examples indicate, in most instances there is no hard-and-fast separation of these categories, whether in everyday life or in folklorists’ work.

No song, no performance, no act of creation can be properly understood apart from the culture or subculture in which it is found and of which it is a part; nor should any "work of art” be looked on as a thing in itself apart from the continuum of creation-consumption.

[Folklore study is] the study of communicative behavior with an esthetic, expressive, or stylistic dimension.

…folklore is artistic communication in small groups.

http://www.afsnet.org/?WhatIsFolklore

Other links

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Folklore and folklife (including traditional arts, belief, traditional ways of work and leisure, adornment and celebrations) are cultural ways in which a group maintains and passes on a shared way of life. 

This “group identity” may be defined by age, gender, ethnicity, avocation, region, occupation, religion, socioeconomic niche, or any other basis of association. As New York folklorist Ben Botkin wrote in 1938,

Every group bound together or by common interests and purposes, whether educated or uneducated, rural or urban, possesses a body of traditions which may be called its folklore. Into these traditions enter many elements, individual, popular, and even "literary," but all are absorbed and assimilated through repetition and variation into a pattern which has value and continuity for the group as a whole.

These traditional forms of knowledge are learned informally within a one-to-one or small group exchange, through performance, or by example. In all cases, folklore and folklife are learned and perpetuated within the context of the "group," for it is the shared experience which shapes and gives meaning to the exchange.

—Ellen McHale, "Fundamentals of Folklore," in John Suter, ed., Working with Folk Materials in New York State: A Manual for Folklorists and Archivists (Ithaca, NY: New York Folklore Society, 1994), p. 2.1

While folklore is private and intimately shared by groups in informal settings, it is also the most public of activities when used by groups to symbolize their identity to themselves and others. —Robert Baron and Nicholas Spitzer, Public Folklore (Washington and London: Smithsonian Institution Press, 1992), pp.1-2. For an individual family, folklore is its creative expression of a common past. As raw experiences are transformed into family stories, expressions, and photos, they are codified in forms which can be easily recalled, retold, and enjoyed. Their drama and beauty are heightened, and the family’s past becomes accessible as it is reshaped according to its needs and desires. —Steve Zeitlin, A Celebration of American Family Folklore (Cambridge, MA: Yellow Moon Press, 1982), p. 2. Folklore helps us to form and express identity in the midst of an always complex, sometimes confusing social context, in which our sense of who we are is frequently questioned and challenged. —Martha C. Sims and Martine Stephens, Living Folklore (2005) Folklore, like any other discipline, has no justification except as it enables us to better understand ourselves and others. —Roger D. Abrahams, Journal of American Folklore81: 157 (1968).

Dan Hill, Cayuga flute maker and player and silversmith, Tuscarora Reservation. Photo by Martha Cooper. See Music and Art to Remember.

For those who find brief definitions helpful, there is no dearth of contemporary formulations: “Materials...that circulate traditionally among members of any group in different versions, whether in oral form or by means of customary example” (Brunvand, in The Study of American Folklore: An Introduction, 1968); “The hidden submerged culture lying behind the shadow of official civilization” (Dorson, in Folklore Forum1, 1968); “Artistic communication in small groups” (Ben-Amos, in Journal of American Folklore, 1971); “Communicative processes [and] forms ... which evidence continuities and consistencies in human thought and behavior through time or space” (Georges, in Sound Archives: A Guide to Their Establishment and Development, 1983)

—Elliott Oring, “On the Concepts of Folklore,” in Oring, ed. Folk Groups and Folklore Genres: An Introduction (Logan, UT: Utah State University Press, 1986), p. 17. 

This book is founded on the simple assumption that there must be some element all folklore has in common (else we could not lump it all together). No doubt an astute student could name several possible unifying characteristics, but I have chosen one: All folklore participates in a distinctive, dynamic process (p.10) Folklore comes early and stays late in the lives of all of us. In spite of the combined forces of technology, science, television, religion, urbanization, and creeping literacy, we prefer our close personal associations as the basis for learning about life and transmitting important observations and expressions. (p.25) Actually, folklore is a word very much like culture; it represents a tremendous spectrum of human expression that can be studied in a number of ways and for a number of reasons. Its primary characteristic is that its ingredients seem to come directly from dynamic interactions among human beings in communal-traditional performance contexts rather than through the rigid lines and fossilized structures of technical instruction or bureaucratized education, or through the relatively stable channels of the classical traditions. (p.28-29) —Barre Toelken, The Dynamics of Folklore(Boston: Houghton Mifflin, 1979)

Folk arts are traditional cultural expressions through which a group maintains and passes on its shared way of life. They express a group’s sense of beauty, identity and values. Folk arts are usually learned informally through performance, by example or in oral tradition among families, friends, neighbors and co-workers rather than through formal education. A living cultural heritage, folk arts link the past and present. Never static, folk arts change as they are adapted to new circumstances while they maintain their traditional qualities.

Folk traditions are practiced by groups sharing a common identity on the basis of such factors as ethnicity, region, occupation, age and religion. They include many kinds of cultural expression—performing traditions in music, dance and drama, traditional storytelling and other verbal arts, festivals, traditional crafts, visual arts, architecture, the adornment and transformation of the built environment and other forms of material folk culture.

—New York State Council on the Arts Application Guidelines, 1994, p.51. 

The folk arts and crafts are those that are learned as part of the lifestyle of a community whose members share identity based upon ethnic origin, religion, occupation, or geographical region. Highly varied, these traditions are shaped by the aesthetics and values of the community and are passed from generation to generation. Some are fleeting—the decorative mehendi painted on a Rajastani Indian bride’s hands before her wedding, the Karpathian Greek mandinathes, composed and sung for the funeral of a friend. Others are enduring—a finely craftedcuatro, the ten-stringed guitar that is the hallmark of Puerto Rican jibaro music; a Seabright skiff used by Monmouth County lifeguards. Some are for work—the rhythmic chanteys sung by menhaden boat crews pulling nets heavy with fish—and others are for play—wooden dradels spun to win Channukah treats. Some are part of festival—West African-derived Trinidadian stilt dances performed for Carnival, Ukrainian pysanky painted with ancient symbols of life for Easter. Others are for daily life—the strip quilts made by African-American women; the brightly colored grape baskets woven by Palestinian women.

Splint and sweetgrass basket from Akwesasne. Photograph courtesy of Traditional Arts of Upstate New York.See Iroquois Basketry Thrives: Report on a NYFS Mentoring Project.

These arts are practiced as part of community life, often playing an important role in events such as work sessions, holy days and holidays, festivals, and life cycle rituals. Folk artists are the practioners who learn these arts in those community contexts by watching, practicing, and learning from other community members. While they consider it important to maintain traditional forms and standards in their work, folk artists also bring their own individual touches to their arts. Their excellence and traditionality is evaluated by community members on the basis of shared standards.

—New Jersey State Council on the Arts Guidelines, 1995-96

Celtic cross created by woodcarver, Peter Teresco. Read about Peter’s art in the NYFS gallery, New York Traditions.

In 1976, as the United States celebrated its Bicentennial, the U.S. Congress passed the American Folklife Preservation Act (P.L. 94-201). In writing the legislation, Congress had to define folklife. Here is what the law says: "American folklife means the traditional expressive culture shared within the various groups in the United States: familial, ethnic, occupational, religious, regional; expressive culture includes a wide range of creative and symbolic forms such as custom, belief, technical skill, language, literature, art, architecture, music, play, dance, drama, ritual pageantry, handicraft; these expressions are mainly learned orally, by imitation, or in performance, and are generally maintained without benefit of formal instruction or institutional direction." —Mary Hufford, American Folklife: A Commonwealth of Cultures(Washington, DC: Library of Congress, American Folklife Center, 1991), p.3.

The folk and traditional arts have grown through time within the many groups that make up any nation—groups that share the same ethnic heritage, language, occupation, religion, or geographic area. The homegrown traditional artistic activities of such groups are often called folk or traditional arts, and they serve both to identify and to symbolize the group that originated them. Pueblo pottery, Appalachian fiddling, Hawaiian hula, cowboy poetry, African-American Delta blues, Lithuanian weaving, Hmong needlework, and Texas-Mexican polkas are examples. They enliven the particular regions of the nation where they flourish and attest to the creative genius of their practioners. —National Endowment for the Arts Application Guidelines for Fiscal Years 1995 and 1996, Folk and Traditional Arts, p.5.

Francisco Javier Durán García, known as Pinto Güira, creates his namesake instruments in his Corona, Queens, basement workshop. © 2002 by Sydney Hutchinson. See Pinto Güira and His Magic Bullet.

Art for Community’s Sake [one component of a larger folk arts exhibit] addresses how folk artists and their communities look at themselves. In the worlds of most artists, work is measured by its purpose—how it will serve the artist, his or her family, or the life of the community—and by its worth—not necessarily in money, but as an expression of the group’s values and tastes. While the values explored in the exhibit are not mutually exclusive, they do represent various "windows" through which we can examine groups and individual artists who represent them. These values include:

• Keeping Traditions Alive: Some artists and their communities place high value on adhering to family or group traditions, preserving them—and the way of life they represent—for the next generation. The processes, tools, materials, designs, motifs, as well as functions, are closely followed. As time passes, some changes may occur, but the pursuit of tradition as a symbol remains important.
  
  
• Making it Useful: Some artists and their communities place high value on the usefulness of the objects they create. The design, materials, and execution all contribute to its function, an important aspect of the "aesthetic" in such things as folk furniture, utensils, and crafts. The look of durability and the object’s ability to stand up to its intended use are important goals of the artist.
  
  
• Keeping Connected: Reinforcing a close identification with a group to which they currently belong is the ambition of many folk artists. They use forms, designs, colors, and motifs which clearly associate them and their work to others with a shared heritage. They may create objects for use by members of the group or to sustain outsiders' views of the group and its traditions.
  
  
• Re-creating Memories: An artist’s ability to recreate memories of shared group experiences is often personal but highly desired and encouraged by his or her group. Great emphasis is placed on precise detail and the object's ability to capture a complete scene or event.
  
  
• Sustaining the Spirit: Some artists place great value on objects that are used as integral parts of religious ritual or that hold special religious meaning for the audience. In creating these objects, the artists choose forms and images that are clearly associated with particular religious traditions.
  
  
• Being Creative: The ability to innovate within tradition is an attribute strongly admired in the shared group expressions of some folk communities. An artist may experiment with forms, materials, and designs in response either to personal choices or to changing cultural influences in his or her life. Resourceful use of found or recycled materials is a challenge many contemporary folk artists relish.

—Varick Chittenden, Exhibit Curator. From the brochure of the folk arts exhibition, Out of the Ordinaryproduced by Gallery Association of New York State (1995).

In sum, folklore is artistic communication in small groups."—Dan Ben-Amos 

http://www.nyfolklore.org/resource/what.html