The first few definitions run something like this (from the Random House definition):
1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
My sense is that this definition is used often in economic or academic circles, in which socialism is the antonym of capitalism, the privatized or free-market controlled means of production and distribution. This is the definition that Ilya Somin uses when he talks about socialism on the Volokh Conspiracy.
Here’s another definition from dictionary.com (Webster’s):
A theory or system of social reform which contemplates a complete reconstruction of society, with a more just and equitable distribution of property and labor
The words “just” and “equitable” are certainly contentious, but the definition at least captures the sentiment that socialism isn’t just concerned with who controls industry. Control of industry is a means to the ends of creating an “equitable” distribution of goods, more even than would exist in the free market.
Since socialism as state control of resources, as Ilya Somin notes above, has become a largely discredited method of achieving class equity, the significance of the proper definition has diminished. Outside academia, the word socialism lost its unuseful connotations of state control, but retained its association with class redistribution of wealth.
It seems to me that in modern usage, the word socialism is meant to describe government policies that distribute resources and wealth from richer to poorer people as a matter of distributive justice. In the United States, the word is used this way by conservatives, especially, who intend a pejorative connotation. Again from Webster’s:
The general tendency is to regard as socialistic any interference undertaken by society on behalf of the poor
This is fine. Language is a constantly shifting thing, and words have always adopted their meaning from societal consensus, not their definitions in archaic texts by centuries-dead German revolutionaries. It is useful to have a word that specifies policies that fight class inequality as an injustice in of itself, or that redistribute income and goods out of convictions about class justice. No other word usefully fills this spot – redistributionism is too technical, liberalism and progressivism too vague and all-encompassing.
And in any event, the distinction between a government which controls industry directly, and one that effectually controls all wealth in society, to distribute as it wills, is a thin one indeed.
Why am I posting this? Well, I’m going to be calling Obama a socialist. I just want to be clear that I prefer the term in its commonly-understood definition, even when its academic one is also appropriate.