Everything that follows should be viewed from the #1 operating principle within Google, Inc.: Serve the users (i.e. searchers) with the best value we can. Every single tool they offer webmasters, marketers and companies is done with the searchers best interest in mind. Google wants only to serve their users. I hope that makes sense.

Latent + Semantic + Indexing = Latent Semantic Indexing (LSI)

Latent means "present and capable of being, though now now active". It applies to "a power or quality that has not yet come forth but may emerge and develop." Latent is derived from words which mean "to escape notice".

Semantic means "of or relating to meaning in language", and was derived from words which mean "to signify meaning".

Now we get to the fun part. Where everyone seems to have focused on "semantic" in their explanations, gone crazy with complicated symbolic logic, and endlessly discuss words, the real "secret" is in the word "indexing". This will get a bit longer...

Indexing as a transitive (active) verb means "to regulate by indexation".

Indexation is "a system of economic control in which certain variables (as wages or interest) are tied to a cost-of-living index so that both rise or fall at the same rate and the detrimenal effect of inflation is theoretically eliminated".

"But that's economics and crap like that!" Yeah, yeah. Economics is presently considered to be the study of the distribution and allocation of scarce resources. Page 1 rankings for "convert-able" keyword phrases are definitely a scarce resource! (In economics, scarce means "not an infinite supply of".) High quality pages that give a high probability of providing what someone is searching for are also a very scarce resource from the viewpoint of any search engine.

Some terms just need to translated. I don't know exactly HOW they're translated, but that will have to be the topic of another post. Got some work to get done.

Have a phenomenal day! :)