We are taught when we learn to write prose that what is demanded is clear, sharp denotative language: words that mean one thing and one thing only. We therefore dread the words "ambiguity" and "ambiguous" in the margins of our papers. In poetry, however, we use the term critically to indicate language that admits more than one meaning and enriches the texture of a poem. The simplest kind of ambiguity is the pun, which intentionally uses one word to mean two different things, usually with a comic effect. For instance, when Mercutio lies dying in Romeo and Juliet he says, "Ask for me tomorrow and you shall find me a grave man," with two meanings attached to the word "grave." Another example of this simple use of ambiguity is the double entendre, which usually adds spice with a second meaning that is sexual or risque.
This poetic device of multiple meanings can extend from the fairly simple pun to quite ambiguous statements that can only be read in the full context of a play, poem, or novel. An example is the obviously contradictory statement in Shakespeare's All's Well That Ends Well when Diana says of another character, Bertram, that "he's guilty, and he is not guilty." In the context of the play, the remark makes perfect sense and both statements are accurate.
Although critics had previously noted this indeterminate and playful aspect of language and its tendency to slip constantly from denotation to connotation, the term "ambiguity" entered the critical vocabulary after the publication in 1930 of William Empson's landmark study, Seven Types of Ambiguity. Empson says in the preface to his book that
An ambiguity, in ordinary speech, means something very pronounced, and as a rule witty or deceitful. I propose to use the word in an extended sense, and shall think relevant to my subject any verbal nuance, however slight, which gives room for alternative reactions to the same piece of language. . . . A word may have several distinct meanings; several meanings connected with one another; several meanings which need one another to complete their meaning; or several meanings which unite together so that the word mean one relation or one process. This is a scale which might be followed continuously. "Ambiguity" itself can mean an indecision as to what you mean, an intention to mean several things, a probability that one or other or both of two things has been meant, and the fact that a statement has several meanings.
(Harry Rusche)