What a good post indeed Richard. Jim Carroll makes a great deal of sense here and I also agree with the sentiments of Malcolm Douglas which Jim has reiterated.

I am a bit confused though by all this reference to "Communities".

I agree that "selection by the community" of songs certainly would take place. Is is another way of saying it is a 'filtering process'
by a small collective group of people over time.
The most popular songs survived to this day because they were popular with that group and were repeatedly requested at fireside gatherings/down the pub/holiday and harvest festivals and hunt gatherings etc.
"Come on John/Betty (etc) sing us your song" would be the popular cry and that is still as it is today in many of our like-minded folk gatherings,isn't it?
That is something we must not overlook or be too bashful to admit.
It is precisely you good people who keep this lovely music going.
Your highly acute observations and comments on this thread proves this.

It is true that we no longer have anywhere near like the same sense of "community" that our forebears knew and their only form of real entertainment was a good old knees-up of singing,playing and dancing.
In todays society we are awash with media and technology to amuse ourselves but for some of us lucky ones the good old knees-up of singing,playing and dancing is still our PREFERRED source of entertainment and comfort zone.
So today the "Folk Community" forms its own tightly knit community and we are all part of it. It is we that will keep the old traditional folk music going and will also add to it in the decades to come.
This is the process and is the reason why it is a continuous and unbroken process that is alive and very much kicking today.

Finally (sorry to go on so) but the term "community " seems to get used too much as a collective "Anon" and fails to give credit to the individuals (although "unknown") who wrote the songs in the first place.
E.G : "..it is the re-fashioning and re-creation of the music by the Community that gives it its folk character" (definition by the International Folk Music Council,1954)
and "The communities that gave birth to the songs have either disappeared or have changed beyond recognition" (Jim Carroll)
These comments worry me because they seem to imply a sort of collective urge to write songs or,dareI say, a sort of mass hysteria!
It's not the communities that created the songs it is an individuals own creativity and toil that created each song. Greatly influenced ,I am sure, by his/her environment, community and personal emotions but still their personal,individual creation.
So can we forget this broad brush "The Community" stuff and think of and drink to those wonderful individuals ( even though we don't know their names) every time we share their passion when we sing their songs.
Lets raise a glass to ANON and long may they live on in their songs that continue to give pleasure, solice and amusement and will do so for decades and centuries to come. And also remember that we too have a part to play in writing songs to be enjoyed by future generations, only this time they will know your name and you will be remembered through your songs and music.

CHEERS