Yes you can create anchor text in HTML. for Example <a href="URL"> Text </a> The text look as hyperlink from the above format it is known as Anchor Text.
anchor text is the text of the live link. to see the example see my signature. these signatures are the live links which have meaningful text to go to the destination page. it is not necessary that anchor text should be a meaningful word but any text that is a live link. services like wordpress give you the facility of just entering the tags which will be appended in the tag cloud. if you want to create your own tags mechanism then you need to program it yourself. most of the times tag clouds is placed on the right hand side of the page