A very good question!
A Twitter List is a way to group the people that you follow or that you want to follow.
To find the "Lists" area on Twitter you need to login and then view your profile (you can do this by clicking on your name, using the link at the top of the left hand column, or clicking on the little person logo on the top right of the screen).
On your profile page you will see a link called "Lists" and this is where you can view any lists you have created or that you follow (because you can follow other people's lists too!).
On the Lists panel there is a link to "Create" and this will let you set up a new list - you need to provide a name, a description, and you need to choose if this will be a public or private list. So, for instance, ifI set up a list for Twitter users who are taking part in this chat (which I intend to) I would set up a list here:
https://twitter.com/#!/suchprettyeyes/cigseforum-socialmedia
To add people to that list I can then either search for them by name or I can go to their profiles, click on the little person logo that appears next to their name, and choose "Add/remove from lists" and then I would need to check the boxes of any lists I wanted to add that person to.
You can add to lists at any time. And if you see a list you want to follow you just need to go to a users profile, look at their lists, click on the list of interest and click the "subscribe" button for the appopriate list.
hope that helps!
- Nicola.
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