How valid are GO (Gene Ontology) terms?
There are quite a lot of articles(1,2, etc.) which have investigated this, I think this article did a great job to give a visual representation of the specificity, reliability and coverage: 


  



also this article noticed the following:


  Compared to electronic annotations, it is not surprising that curated
  annotations have a considerably lower average coverage (Fig. 8,
  vertical lines). Indeed, the main appeal of electronic annotations is
  precisely that they scale efficiently to large quantities of data. But
  in terms of reliability, and contrary to current beliefs, curated
  annotations that use evidence other than experiments from primary
  literature do not fare better than electronic annotations (Fig. 8,
  horizontal lines, Fig. S9 in Text S1). In fact, we observed a higher reliability for electronic annotations than for curated annotations (0.52 vs. 0.33). the figure blow is figure 8 from the article
  


I don't know if you are just curious in the reliabilty of GO or if you are searching for an other kind of hierarchical annotation method, but e.g. for enzymes there are also EC numbers.  I can continue citing the article but I would suggest to read the article from which I used the figures ( Quality of Computationally Inferred Gene Ontology Annotations). Secondly this article is more recent and  something similair was done here. Among other things they also compared the computional annotation from 2008 with manual annotation in 2010 for the same set of GO terms:


  


So I would also recommend to read The what, where, how and why of gene ontology—a primer for bioinformaticians. This article and the previous mentioned article will give you a good insight in GO terms.