As a philosophical term, ontologists theorize on the nature and categories of existence. As a library term, it is a little more down-to-earth. To an information scientist ontology means the study and application of methods for organizing information. For example, when original catalogers examine a book and determine what call number to assign to it and which terms (often from a controlled vocabulary) describe its contents the best, they are making ontological decisions. This is similar to how biologists classify organisms and physical traits and conditions, or astronomers classify extraterrestrial bodies, and so on.
As technology and has advanced and the profession has developed, different ontological theories on the best way to organize information have arisen. This means not just the judgment decisions mentioned above or the classification systems or subject headings used by libraries, but the types of necessary decisions themselves required to adequately catalog an item so that it can be searched for and retrieved by users. For example, it could be argued that full-text searching makes the need for any other ontology obsolete.