The idea is that you specify at least one 'top' (or 'geographical context') tag. These are about 40 broad classes describing the main aspect of the subject at the time the image was taken. You can add additional top tags if you like, depending on what surrounds your main subject. The top tags are shown in the tagging box if the radiobutton "context list" is selected.
In addition to the top tags, you can highlight detail that you feel is important. For that purpose, free-form tags are also available as an option. You can pick the most salient words from your description or any others that you would like your image to be found by if someone uses the word as a search term.
In addition you can use prefixed tags for collections of special interest: A railway enthusiast might create a prefix 'locomotive:' and use it to tag the different engines in their pictures. Or someone interested in churches could use a 'denomination:' tag to indicate which particular community uses the place of worship shown. You can also use existing prefixes, e.g. 'place:' or 'near:' to indicate which town something is in or near to. Have a look at what prefixes and tags others have already created: http://www.geograph.org.uk/tags/ . However, there is no need to restrict yourself in any way to that list. Prefixes are best used wherever it is likely that there will be other examples of your subject (church, locomotive...) with a slightly different attribute (Methodist, Diesel...).
As far as tags are concerned, chaotic growth is encouraged - the top tags are meant to counterbalance that!