Awareness and use of agile methods has grown rapidly among the information systems development (ISD) community in recent years. Like most previous methods, the development and promotion of these methods have been almost entirely driven by practitioners and consultants, with little participation from the research community during the early stages of evolution. While these methods are now the focus of more and more research efforts, most studies are still based on XP, Scrum, and other industry-driven foundations, with little or no conceptual studies of ISD agility in existence. As a result, this study proposes that there are a number of significant conceptual shortcomings with agile methods and the associated literature in its current state, including a lack of clarity, theoretical glue, parsimony, limited applicability, and naivety regarding the evolution of the concept of agility in fields outside systems development. Furthermore, this has significant implications for practitioners, rendering agile method comparison and many other activities very difficult, especially in instances such as distributed development and large teams that are not conducive to many of the commercial agile methods. This study develops a definition and formative taxonomy of agility in an ISD context, based on a structured literature review of agility across a number of disciplines, including manufacturing and management where the concept originated, matured, and has been applied and tested thoroughly over time. The application of the texonomy in practice is then demonstrated through a series of thought trials conducted in a large multinational organization. The intention is that the definition and taxonomy can then be used as a starting point to study ISD method agility regardless of whether the method is XP or Scrum, agile or traditional, complete or fragmented, out-of-the-box or in-house, used as is or tailored to suit the project context.