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A wiki is a website that allows a person to add content, but also allows anybody to edit the content, or add their own. It is pronounced "wicky" or "weekee".
Apparently WIKI is derived from "What I Know Is", which nicely sums up the idea behind the database.
Wiki is not an acronym, though certainly it fits in well. Wiki is Hawaiian for quick. Ward Cunningham (the creator of the worlds first WikiWikiWeb) picked the name as he thought it would sound better than QuickQuickWeb (the double wiki is from the Hawaiian practice of saying a word twice to give it more emphasis).