The term referring to one not being sexually identified in public, or being hidden from others.
While not always referring to one's sexual identity, it is generally believed to be the act of hiding one's sexual preferences from friends, family, and strangers.
Earliest reference appears to have been in the 1600's.
At that time, it was mainly used to describe someone who had a secret to hide, not necessarily involving one's sexual preference. In fact, there isn't much indication that it had anything to do with one's sexuality, at that time period.
Closeted also became noted during that time period.
It is thought that these terms simply were used to denote secret, or hidden.
The term became more associated with one's sexual tastes in the middle of the 20th Century, after WWII.
With the increased aggressive attempt by heterosexual society through law enforcement, to ferret out Homosexuals, the term became popular in the 1950's and remains so today.
It should be noted, that until the 1970's, homosexuality was believed to be a mental disorder, as well as being criminal in many regions of the world. (see 'crimes against nature')
To keep hidden from most, one does not associate or divulge their preference. In some instances they may even deny their true sexual feelings to themselves, though others may know they are. (usually referred to as 'glass closet')
It is considered to be harmful in some circles, for men to hide their sexual orientation, due to increased feelings of guilt, of shame. It can lead to serious repercussions, which is why some adhere to a policy of 'outing' such individuals.
Some will go to extreme lengths to show a public side, that appears heterosexual in nature, when they are in fact homosexuals. This can involve supporting anti gay measures or laws, or in pursuing the opposite gender.
Practice (Associated Acts): Outing is the opposite of being in the closet. However, it is related in that most 'outings' are at the hands of those who believe it is better to be out, than closeted. Some outings are unintentionally done, though most are by design.
The concept is that in order to rid one's self of doubt, of guilt, of shame, for being different, they have to become public about their needs, or preferences.
There is some concern too, that a person who remains closeted, has a higher risk for suicidal tendencies.
Noteworthy: National Coming Out Day is a celebration on October 11th, in the USA, and a few other Countries, which is about encouraging Gays to show their support of Gay Rights.
It was in celebration of the second march on Washington D.C. for Gay Rights, which attracted about a half million demonstrators.
The day was established/founded in 1988 by Dr. Robert Eichberg and Jean O'Leary.
The event was used to discuss Gay Rights, and other issues relating to being homosexual. It's purpose was to raise awareness, for the GLBT society, unlike Gay Pride Days, which is a celebration by GLBT for being who they are. Though it does also raise awareness.
It can be used to denote a person who refuses to discuss, or identify with certain behavior patterns. For example, someone who drinks excessively in private, could be termed as being a 'closeted alcoholic'.