Hashtags are words or phrases with a hash (#) in front of them.
Hashtags are very important when you are on twitter. Hashtags allow you to spread your message or tweet to a larger number of people.

Usage :

When you update your status with a cricket score like
“India is in a commanding position 253-0 is the score” Then it makes a lot of difference if you add the hashtag #cricket to your tweet this way anyone tracking for cricket related tweets will find yours as a result giving you exposure.

Hashtags are essential as many people do use the search feature of twitter. Hashtags are helpful in spreading breaking news, supporting a cause or for promotional purposes.

Hashtags allow you to track conversations related to a specific thing. Like if you love amrita rao and talk a lot about her with your group of friends the you can use a tag #luvamrita. This all your friends can track the discussions when they want.

Creating hashtags is very simple all you have to do is follow @hashtags on twitter then start using the tag. It is important that your tag is unique creative and short(twitter has 140 char limit)

Go ahead create a tag have fun