Folly can be defined as "a lack of good sense, understanding, or foresight." The term is often connected with descriptions of young people, being used to explain foolish acts undertaken because they lack the experience and knowledge that comes with age.
Shakespeare uses the term in Twelfth Night, among other places. In Act III, Scene 1, Viola and Feste have a conversation during which Feste demonstrates his skill with word play. Viola asks if he is "Lady Olivia's fool." Feste answers, "No, indeed, sir; the Lady Olivia has no folly: she will keep no fool, sir, till she be married;" - implying that she is not lacking in good sense, but will allow her husband to supply the lack of common sense for the couple.
After he leaves, Viola comments on Feste's ability to recognize the mood and intellect of those he talks with. She understands that the clown's folly is actually an expression of a very sharp wit, but that others' folly reflects their foolishness pointed out by the fool.
This is a practise
As full of labour as a wise man's art
For folly that he wisely shows, is fit;
But wise men, folly-fall'n, quite taint their wit.