Where does the word #hashtag come from?

Hashtags are the # symbols used on Twitter and other social media, like Instagram and Facebook.
A hashtag provides a metadata-tag or label to indicate the subject of a tweet or a post. Twitter co-founder Chris Messina, spotted that this would allow messages to be grouped according to content, making them easier to find - see here
A Twitter search for hashtags, for example, will bring up tweets containing #hashtag.

Is there a protocol regarding  the use of hashtags?

The evolving protocol is that more than two hashtag per tweet is trying too hard to attract traffic.

Most successful use of hashtags?

The most celebrated/infamous user tweeter is, of course, resident in the White House. Here are the hashtags Donald Trump used most heavily during his election campaign:
#MAGA (Make America Great Again) is perhaps the most effective hashtag of all time. #ICYMI (in case you missed it) is shorthand familiar to regular social media users.

But aren't Twitter users generally #antitrump? 

Though #antitrump sentiment dominates Twitter its hashtags have been less effective. The problem is that the anti-Trump camp covers the complete political spectrum. For example, left wing #resistance tweeters alienate conservative #nevertrump supporters.

What to avoid?

Twitter has a short attention span and can be ruthless. Tedious, self-serving platitudes (#hardworking) can invite derision while amusing trivia (#CareerEndingTwitterTypos or #1LetterWrongMovieis more likely to attract traffic. Tweet with care, however - a foolish comment  can have a devastating impact - as this Jon Ronson TED Talk demonstrates.

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