As defined in wikipedia, a wiki is a group of Web pages that allows users to add content, as on an Internet forum, but also permits others (often completely unrestricted) to edit the content.
Wikipedia is the most famous example of a successful wiki.
Using a wiki (or many wikis) in a corporate environment represents a fundamental cultural change. The organization has to let go. It has to unshackle its intellectual capital from the constraints of outdated records management, from paralyzing intranet controls and from a variety of other barriers to building corporate information in a truly collaborative way. Not simple. The challenge is not the technology - the technology side can be free (at least for the software). It is developing an awareness of how social software, including wikis, should be exploited to reshape organizational information environments. After awareness, to secure trial and adoption. For some companies and governments, that's a tall order...
See post on topic by Ward Cunningham.