The Wikipedia version makes sense, a drop cap is an initial that extends into the line(s) below, but an initial might as well extend into the space above.
To the Germans among us, initial might be more telling than drop-cap since the German word is Initiale.
The understanding issue Alan mentioned is interesting. The only question that actually refers to this kind of letter is asked by an Austrian, the others don't use technical terminology.
Since there aren't too many questions (= 3) about these matters on here, a distinction between general initials and drop caps doesn't seem appropriate, but neither does tagging a question about an initial with "drop-caps". Hence, I think renaming the tag is a good idea.
\placeinitial
in ConTeXt. – Aditya Jun 13 '11 at 19:05