To me, there are actual several groups of people involved in folk music. First there are the musicians who, whether long dead or just getting started, are "the folk" who write the songs and pass them on. The only standards they seem to adhere to seems to be whether or not a song is any good, whether they like the song or not, and whether anyone will listen to them sing it.
Then there came the people who decided, usually for nationalistic reasons, that "the songs of my people" needed "collecting" for posterity. These are the people who formed endangered folk song societies, had "revivals" and other such things. Their self-invented job description was to decide just what was and wasn't going to be a folk song. Depending on where in the world you live, and which English and/or Anglo American antiquarian/folklorist/folk song collector made it to your doorstep first, the approximate date this phenomenon began varies from about the 18th c. down to the early 20th. Later if you happen to have the misfortune of being one of the best folk singers in Tora Bora and other remote and exotic locales.
Doesn't matter whether you are talking about the printing press, the gramophone, the rise of the capitalist music industry dividing the "folk" music world by five in order to conquer it, or the MP3--there has pretty much always been somebody around "recording" folk songs, even just in their own memory, so they could steal the song and make the version they prefer that hallowed thing known as "the standard version" which will bring them fame or fortune, hopefully both. Many a song and a singer have been exploited (Alan Lomax/Leadbelly story is an easy example to refer to) by these zealous collectors on a mission from God to save those songs. This was done easily because the musicians were vain enough to believe their own version was, without a doubt, the best.
And then came the "academic discipline" folk. They got tenure and fabulously secure academic lives by closely examining what everyone else was doing. This last group of PhDs-come-lately are generally viewed with contempt by the above two groups. Unless one of these expert authorities agrees with them. These are the publish or perish vultures you sometimes see circling in the air above "traditional music communities" waiting for a song or a singer to die so they can swoop down upon it, and carry it off to their nests and live off it, hopefully for the rest of their lives so they don't have to keep going back out to do that terrible fieldwork (the native folk have such terrible amenities, you know).
And finally, we have the audience. The punters. The traditional community. The inconspicuous and conspicious consumers of folk. They are the ultimate arbiters of folk--the final judge, jury, and executioners, who decide whether to let the song and/or singer live on as folk, or whether to let them die. Needless to say, this last group is the least popular of all.