Google Zeitgeist is a report of an array of counters. Wait! What? When I, you or anybody of this planet makes a search for something using Google or Google related applications, Google stores that term or keyword (it could be phrase) in a DBS (data base system).
If another identical word/(s) or sentence/phrase is searched using Google search engine, this will increment the stored value of that word/(s) or sentence/phrase with +1. It is a counter of that word or sentence.
This simple process keeps track of searching behavior in a determined period of time, and a ranking could be made out of this. And, that is exactly what Google Zeitgeist does: ranks searches by their frequency and draws up a ranking at the end of the year.
Using Google search engine amplitude, Google Zeitgeist segregates terms or sentences in classes or domains of interest. This way, we could follow the movie top, the news top, the sport top, the music top, the social networks top, and so on.
This segregation is also done by country, using IP sets as layer 1 and further by domains of interest as layer 2, and you could see what is searched most from your country.