Some users might be put off by the idea of a "wiki", simply because it's an unusual term that doesn't really describe what it actually is. If you want a lot of community contribution and interaction within the wiki, you might consider giving it a name more fitting to your community.
Most basically, a wiki is a type of CMS or Content Management System. While a wiki can be used for many different purposes, many a wiki focuses on article-based content, making it an Article System.
What makes a wiki different from a traditional article-based CMS is its inherent understanding of the interconnectedness of content. A wiki provides tools to manage the relationships between different articles, in case your articles are more than just serial content.
Perhaps the most well-known feature of a wiki is its ability to let multiple users work together to write a single article. VaultWiki has this capability, but traditional authorship is also supported.
A wiki by default also keeps track of changes users make to articles, so that changes can be reversed with very little hassle if necessary.
In short, a wiki can be used for anything that a traditional article system might be used for: news, site content, blogs, etc.
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