Faceted navigation is a way to browse information along multiple dimensions.

Here's a KM world article on what it is and what it's likely to be used for:

So how do facets work their powers? First, we need to state what I’ll call Busch’s golden law of facets, named for Joseph Busch of Taxonomy Strategies, a past president of the American Society for Information Science:

Four facets of 10 nodes each have the same discriminatory power as one taxonomy of 10,000 nodes.

That’s stunning. That means that with facets, I can describe a collection with 40 nodes (aka subject categories) that would take a taxonomy 10,000 nodes to describe. That’s for an idealized case, of course, but the gist of it holds true in the real world. The bottom line is that with facets, we can make do with orders of magnitude fewer categories than we needed in a taxonomy.

That’s because taxonomies are a type of pre-coordinate indexing, meaning that its builder anticipates the compound subjects people can browse along later, like “18th Century French History.” In contrast, faceted navigation is based on post-coordinate indexing, meaning that end-users string together their own compound subjects at search time. They do this by combining simple elements from multiple facets, in this example, (Time: 18th Century) + (Country: France) + (Topical Subject: History).

...via elearningpost