In this thread, Etsy admin kfarrell said:

We haven’t noticed in increase in the number of mis-tagged items since we started suggesting more tags.

We do realize that our search system is imperfect, and we’re working on a variety of solutions to make it easy for buyers to find what they are looking for.

The best thing to do if you’re searching for a particular item is to enter exactly what you want into the search bar. It actually works really well when you give it all your criteria…

for example, last night one of our lovely engineers entered a search for “gold” and then grumbly started entering various NOT shirt NOT 14k etc etc to filter out what he didn’t want.

So we said “well, what DO you want?”

“14 karat gold jewelry without gemstones”

the search for “14k gold jewelry not gems” turned up tons of what he was looking for.

We are working on search, but it is a very complicated question, with multiple solutions- each of which has its own merits and pitfalls. We understand both the importance of buyers easily finding what the want as well as the need for a speedy and reliable site over the busy holiday season.

For more UEN coverage of this topic, see here and here.