1. A computerized method of representing a dataset with a taxonomy, comprising: obtaining a dataset containing a plurality of records; initializing a folder-set containing a plurality of folders; assigning labels to folders within the folder set; classifying the plurality of records into the plurality of folders according to a predetermined entropic similarity condition; and merging a plurality of folders when it is determined that a similarity between the plurality of folders is greater than a dissimilarity between the folders; wherein the computerized method of representing a dataset with a taxonomy occurs within a physical computer.