Tim O'Reilly's article defines Web 2.0 as a set of principles centered around harnessing collective intelligence through open platforms and user-generated content. Key aspects include lightweight programming models that allow for remixing and hacking of data, continuous improvement of services based on user feedback, and treating users as co-developers rather than just consumers. Major companies exemplifying these principles include Google, Wikipedia, blogs, and others that have built platforms enabling large networks of users to collectively create and share information.