"Card Sorting is a user-centered design method for increasing a system’s findability. The process involves sorting a series of cards, each labeled with a piece of content or functionality, into groups that make sense to users or participants."
"Card sorting: a definitive guide." by Donna Spencer and Todd Warfel in Boxes and Arrows.
Related to card sorting is Affinity Diagramming (KJ Method), which is similar to card sorting, and is often used for brainstorming. This technique allows a group or individual to organize large amounts of disorganized data and information into groupings based on natural relationships. The chunking up of the groups is then followed by creating headings for each.