There are (at least) 3 particularly boneheaded 'definitions' of folk music that I hate and which always get my back up. These 'definitions' are as follows:

(i) "I like contemporary popular music and I like folk music, therefore contemporary popular music must be folk music."

(ii) The marketing man's definition which is anything 'acoustic' (but including 'folk rock' and excluding 'country' - which is another category) and anything which doesn't fit easily into any other category eg. military bands.

(iii) The "I ain't heard no horse sing it" 'definition' - variously attributed to Louis Armstrong, Leadbelly and, now, Burl Ives (thanks Leadfingers - you're a star - or something - possibly ...).

We should really start with Anahata's statement, above, about folk music being a process. But then you have to think a lot, and review the evidence, and listen to traditional singers, and be prepared to change your mind ... and it's usually all too much for people who like rock music and want to replace folk music with it ... isn't it?