I don't see any reason to change a word of "the 1954 definition" (by whom?) as you quote it.

Modern commercial pop has its place, and may in many instances (I'm being kind here) be good stuff. But the nature of folk music has to do with the live, continuously changeable nature of songs which live and are propagated by "just folks", and just because they like 'em, with (little or) no profit motive or official sanction.   

Dave Oesterreich