Settings: Relevant Tags
There's more going on here than meets the eye, and it deserves a deeper explanation that you’d at first think. This feature improves the on-page theme of your posts and helps get more pages into Google's main index...
Each tag is another section (essentially like a category in WP) which lists posts. Whilst Google will probably index your posts PDQ, it won't index your tags, categories, author pages etc as quickly. By increasing the level of perceived activity surrounding your blog Google will crawl you more often, index more pages and send you more traffic.
So WPI helps here by creating high quality tags for each post you make. Firstly this gives you more pages which can each pass PageRank to the rest of your site and consequently get more content into the main Google index. Secondly it creates keyword links from each post to the tag pages. Part of the on-page analysis Google does is in the outgoing link anchors. Related keywords as link anchors on a particular page will increase the page's relevance for it's core key phrase. So by using really high quality, thematically related tags you're doing a better job of informing Google about the core concept your post is about, leading to (eventually) more targeted traffic.
WPI will try and get the number of tags you choose, but if it can’t find enough quality tags from the content, you may get less. Reasons for this could be that the content is too short to pull good keywords from, or it’s simply not a keyword dense piece of text.