(Whoops! Clicked on "Submit" before I was ready.)
A lot of good points, Burke. This spirited discussion was good for me in that it got me digging into my old textbooks, which I should have spent more time with the first time around.
Up until the early 1700s composers and musicians thought almost exclusively in "horizontal" terms -- melodic line -- with the interweaving of two or more melodic lines (counterpoint) being subject to all kinds of rules. One of the things that makes J. S. Bach such a biggy is that just about everything he wrote (and some very complex stuff) was super-"correct" in terms of the rules, but in the process he somehow rewrote the rule book for counterpoint. Strange that harmony, i.e., thinking "vertically" didn't really get started much before the early or middle eighteenth century.
Another tidbit I just ran across was that the first extensive use of the modern major scale as we know it (actually the same as the Ionian mode) was by the early troubadours. When, exactly, nobody can say, but the troubadours started their wanderings as early as the eighth or ninth century. Many of the younger monks and scholars had been set to the task of translating early Roman poets from the Latin in an effort to improve the church's rather abysmal knowledge of Latin grammar. In doing so, they encountered Catullus, their eyebrows (among other things) went up, and they began suspecting that the "sins of the flesh" might be worth some further investigation. At the same time, monasteries near the coastlines were increasingly subject to Viking raiding parties (the Vikings, being pagans at the time, were not averse to stomping in, laying about them with sword and ax, and running off with golden crosses, chalices, and other pretty trinkets) so sometimes churches and monasteries were not real safe places to be. Many young monks and scholars defrocked themselves, picked up a portable musical instrument of some kind, and took to the roads to see some of the world. They supported themselves through their knowledge of poetry (Catullus and others) and their musical skills. Helen Waddell's The Wandering Scholars details the fascinating story of the early troubadours and wandering minstrels who, she says, were responsible for writing and spreading many of the older folk ballads!. Taking the news of the day or some interesting story, writing it into a poem, and setting it to music. Anyway, the major scale (Ionian mode) wasn't used that often by the church, because it wasn't mournful-sounding enough for chants. It sounded too bright, happy, and full of lust! Church musicians of the time called it modus lascivus! But the troubadours were undeterred (not unlike modern folksingers) and used it freely. They also made extensive use of the other modes, which may account for so many of the older ballads being modal.
On chords, I just recalled a demonstration in a theory class I took in 1963 at Cornish School of the Arts. Professor John Cowell, stepped up to the piano and carefully arranged his feet and fingers (I don't play piano, so I'm not sure how he did it). He held the appropriate pedals down so that the sound would sustain, then he came down heavy on a combination of notes -- a stack of perfect fifths, as many doublings as his fingers would allow. We could hear a major 3rd, even though he wasn't playing one! He told us that the combination of notes he played, further combined with the piano's sustain, reinforced the overtones so strongly that you could hear notes that -- well -- were they really there, or weren't they? On paper, no. But in the reverberating air, yes!
I think you are right about context. Whether a particular combination of notes should or should not be called a "chord" -- especially as it relates to folk music -- is literally academic.