How to use hook_menu_link_alter() on taxonomy term view? When viewing a taxonomy term, I want to change the 'Edit' link (in the admin tabs) to say 'Edit this term' instead.

In taxonomy.module, the menu item is defined like this:

function taxonomy_menu() {
    $items['taxonomy/term/%taxonomy_term/edit'] = array(
        'title' =&gt; 'Edit',
        'page callback' =&gt; 'drupal_get_form',
        // Pass a NULL argument to ensure that additional path components are not
        // passed to taxonomy_form_term() as the vocabulary machine name argument.
        'page arguments' =&gt; array('taxonomy_form_term', 2, NULL),
        'access callback' =&gt; 'taxonomy_term_edit_access',
        'access arguments' =&gt; array(2),
        'type' =&gt; MENU_LOCAL_TASK,
        'weight' =&gt; 10,
        'file' =&gt; 'taxonomy.admin.inc',
      );
}


So in my module, I try to do this:

function mymodule_menu_link_alter(&amp;$item, $menu) {
  if ($item['link_path'] == 'taxonomy/term/%taxonomy_term/edit') {
    $item['link_title'] = 'Edit this term';
  };
}


After clearing cache and rebuilding menus, the menu item still says 'Edit'.

Is this because the menu item type is MENU_LOCAL_TASK? Or perhaps I am missing something else?
hook_menu_link_alter() is invoked from menu_link_save(), which is the function called when a menu link is saved. The code you wrote for that hook would be invoked when, for example, you add a menu link from admin/structure/menu/manage/main-menu/add, and use taxonomy/term/%taxonomy_term/edit as value for Path. 

As Clive said, hook_menu_alter() is the hook you should use to change the menu item defined in hook_menu() from a module.