The wisdom of the crowd is another concept that seems wonderfully simple at first but suffers under closer examination (the other being the net generation). The concept of collective wisdom being more valid than individual wisdom gained global coverage through the work of James Surowiecki in 2004 (The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations) and there are many convincing examples of mass collaboration being extremely successful; Wikipedia, Digg, Amazon and many more.
This concept has been a driving force behind the development of Web 2.0; the power of collaboration. Surowiecki noted however that not all crowds are wise and that there are a number of prerequisites for wisdom: the members of the crowd should be independent of each other and represent a diversity of opinions.
I read an article in Read Write Web called The dirty little secret about the "Wisdom of the Crowds"- there is no crowd. It claims that the crowds behind many of the success stories like Wikipedia are actually a small number of dedicated enthusiasts plus a large mass of relatively passive members whose contribution is negligible. Evidently very few actually bother to vote on Amazon and Digg and so the aggregated wisdom represents a much smaller crowd than we previously assumed. I saw an analysis of Wikipedia entries a while ago and although a subject had been edited by hundreds of people about 90% of the editing had been carried out by 2 people, the others had been content to edit a sentence of a misprint.
The conclusion is that crowds can be intelligent but not always. Crowds are unlikely to come up with a stroke of real genius but are good for brainstorming, editing and revising. It's wise to remember that the crowd is seldom as large as it seems.