<p>Colleagues/moderators, let me bring you attention to the tag <a href="https://stats.stackexchange.com/questions/tagged/indicator-variables" class="post-tag" title="show questions tagged &#39;indicator-variables&#39;" rel="tag">indicator-variables</a>. Questions labeled with it show multiple understandings of the term.</p>

<p>Some of the understandings are really special at all (such as indicators as "items loaded in a factor analysis"), but two-three most frequent (seen not only locally but in "literature" at wide) are:</p>

<ol>
<li>Indicator variable is any <em>binary</em> variable (1 = "present" or "this
category"; 0 = "absent" or "not this category").</li>
<li>A narrower definition, indicator variable is just a <em>dummy</em> (aka one-hot)
variable, i.e. one of the binary variables constituting the binary
set corresponding to a single nominal variable.</li>
<li>Indicator variable is a term wider than for binary coding scheme and is a synonym of <em>contrast</em> variable (i.e. deviation or Helmert codings are also "indicator").</li>
</ol>

<p>See <a href="https://stats.stackexchange.com/q/125608/3277">this</a> and some other threads. My own vote oscillates between definitions (1) and (2), but not with (3). </p>

<p>What is your understanding? What should we do with tag <code>indicator-variables</code> in general? Should it be kept?</p>
