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It also means "part of the canon", i.e., one of the books composing the Bible, as opposed to apocryphal books. It is used most often when describing bodies of literature or art: those books that all educated people have read comprise the "canon". (See also canon (fiction)), or as a popular term in computing jargon (where it has the same basic meaning).
Mathematicians have for perhaps a century or more used the word canonical to refer to examples that common sense suggest should be the standard ones. For example, the "canonical basis" of the vector space Rn is the basis (linear algebra) in which each basis vector is an n-tuple whose components are 0 except for one component that is 1.
Some circles in the field of computer science have borrowed this usage from mathematicians. It has come to mean "the usual or standard state or manner of something"; for example, "the canonical way to organize a file system is as a hierarchy, with extensions to make it a directed graph". For a good story about the word's use among computer scientists ( recursively - thereby making it doubly amusing to them), see the Jargon File's entry for the word.
Some computer scientists have been known to use the word canonicality. Among normal humans, by contrast, canonicity is the canonical form.