What a hashtag means
The word combines hash, for the pound sign, with tag, a label. Before social media picked it up, the # symbol already marked channel names in IRC chat rooms in the late nineties, the same logic behind today's use: grouping a conversation under one shared term.
The jump to mass use came on August 23, 2007, when designer Chris Messina proposed on Twitter that the pound sign be used to mark groups of messages, with #barcamp as his first example. Twitter turned the idea down at first, and it wasn't until 2009 that the platform began turning hashtags into clickable links. From there the mechanism spread to the rest of social media, each platform building its own version of it.
It shouldn't be confused with a product tag or a search keyword: a hashtag lives inside one specific platform, not inside Google's search engine, and its job is to group posts within that network, not to rank a web page.