Difference between an ontology and a taxonomy?

I  am often asked what the differences are between an ontology and a taxonomy. They are often used interchangeable, but what is the real difference?

A taxonomy is a classification of things in a certain domain.An ontology describes the world. Some people think of it as putting the universe in a bottle.

Look at the following example:

TAXONOMY:

Cats
    Related term: Housepets
    Narrower term: tabby cat, black cat, kitten
    Broader term: Housepets

ONTOLOGY:

Cats
    LivesIn: House
    Chases: Mouses
    CrapsOn: Carpeting

Further readings:

• differences between a vocabulary, a taxonomy, a thesaurus, an ontology, and a meta-model