The traditional approach to defining literacy would in simplest terms be the ability to read and write. In the recent decades we seem to be moving from the traditional definition and more into one that basically states that literacy is the ability to receive and send messages successfully to indicate knowledge and understanding of a specific subject area. There are two definitions that I feel sufficiently define literacy.
“Literacy is not the name for a finite technology, set of skills, or any other ‘thing’. We should recognize, rather, that there are many specific literacies, each compromising an identifiable set of socially constructed practices...” Source: Lankshear, 1987 (1)
“Literacy involves a complex set of abilities to understand and use the dominant symbol systems of a culture for personal and community development at home and at work. The need and demand for these abilities vary in different contexts and societies. In a technological society, the concept is expanding to include digital media in addition to print alphabets and numbers. Individuals must be given learning opportunities to move along a continuum that includes reading, writing, and numeracy in print and digital environments and the critical understanding and decision-making abilities they need in their lives. However a culture defines it, literacy touches every aspect of individual and community life.” Source: The Centre for Literacy,1989, revised in 2014. (2)
I feel that these two definitions are appropriate definitions of literacy considering the age we are currently in. Literacy is now a noun that should be accompanied by an adjective to depict the subject being described. It is a proficient display of knowledge and understanding of a subject. People can consider themselves literate in things such as wine literacy, health literacy, social literacy, etc. We are now realizing that we communicate successfully through other means besides reading and writing, so we should not only be measured on our ability to communicate successfully through those two, but also the other means. People communicate differently based upon the subject matter and their knowledge on it and so their competence level changes with the specific subject.

In addition to literacy being defined by specific areas, I also think that literacy is also something that is measured in levels. Typically adults are on a high reading literacy level than children are. This does not mean the children are illiterate, but simply that they are on a lower level for reading literacy. Today most children have a much high literacy rate in understanding how to operate and use the new devices and applications that are coming out while it may take their parents a longer period of time to figure out how to operate and use them to their optimum ability.
Using the simplified definition of literacy being the ability to receive and send messages successfully, literacy is a necessity. It is want allows us to successfully communicate in receiving, sending or both to people of the past, present, and future times. There are certain types of literacy that should always be preserved such as the ability to read and write/compose since it is a adequate way of gaining knowledge and understanding the events and state of being people of the past went through and why.
Instead of trying to narrow down the definition of literacy to specific subject and ability and I think it is better suited to say in a more generalized tone that literacy is the ability to competently give an indication of knowledge and understanding on (a) specific subject(s). What do you think?
Sources Cited:
(1) Lankshear, C. Unknown. Unknown, 1987. Electronic. http://engl1102spring2015.rswsandbox.net/blog-project-prompts/blog-post-1-defining-literacy/
(2) Literacy, The Centre for. What Is Literacy? 1989. http://www.centreforliteracy.qc.ca/about/literacy
(3) Unknown. Little Boy Teaching Adult A, B, C's on Computer. Unknown. https://www.illustrationsource.com/stock/image/80564/little-boy-teaching-adult-abcs-on-computer/?&results_per_page=1&detail=TRUE&page=9