A hashtag is used to index keywords or topics on Twitter or Instagram. This function allows people to easily follow topics they are interested in.
Simply put, a # allows people to find what you’re sharing on social media. Think of it this way: There are 500 million tweets sent per day. 500 million. PER DAY. Imagine your followers trying to find your posts in amongst all those other tweets. Impossible.
What a # does, is allow people to search for words and terms that matter to them, so they can see tweets (also referred to as content) that only relate to their interests.
It’s the same idea with the name of your town. For example, #Stroud. People can look for content around #Stroud and yours will come up.
Here's an example of how to use #hashtags on Instagram.