A term is a word or a phrase that can be associated with an item in Microsoft SharePoint Server.
A term set is a collection of related terms. You can specify that a Microsoft SharePoint Server column must contain a term from a specific term set.
Managed metadata is a way of referring to the fact that terms and term sets can be created and managed independently from the columns themselves.
Local term sets are created within the context of a site collection. For example, if you add a column to a list in a document library, and create a new term set to bind the column to, the new term set is local to the site collection that contains the document library.
Global term sets are created outside the context of a site collection. For example, the term store administrator could create a term set group called “Human Resources” and designate a person to manage the term set group. The group manager would create term sets that relate to Human Resources, such as job titles and pay grades in the Human Resources term set group.
Users can see only global term sets and term sets that are local to the user’s site collection.
Go to Central Administration -> Application Management -> Manage metadata Service applications .
Here already we created One group name called Splessons, Right click on that group,then click on New Term Set
Here i created Term set name called Sharepoint.
Right click on that Term Set name called Sharepoint ,then click on Create Term
Like below we can create many terms