The term canon is beset with critical dangers, but it's too widely used to be ignored. The term derives from the Greek term for "ruler" (as in "yardstick," not "governor"). It was later used to describe the "official" books of the Bible.

Today "canon" refers to what are considered the most important works in a national literature or period: authors widely read and studied (such as Shakespeare and Melville) are accepted as "canonical," while those not accorded the same degree of respect (such as Barnabe Googe and Clare Kummer) are outside the canon.

It's worth remembering several things about the canon. First is that there's no sharp line of demarcation between the ins and the outs: in some circles, for instance, Margery Kempe is canonical, and in some she's noncanonical. Second, canons are constantly changing. Authors pass in and out, sometimes going peacefully, somtimes after bitter wrangling between critics. Much feminist criticism, for instance, has been an effort to introduce or restore previously neglected women writers to the canon.

From the Guide to Literary Terms by Jack Lynch.
Please send comments to Jack Lynch.
Note: This guide is still in the early stages of development.
Three question marks mean I have to write more on the subject. Bear with me.