I took a course on "Folk Art" in college. "Folk Art" was defined quite clearly as the art of a sub-culture that exists within a larger culture and yet remains separate from it. In other words, the art of the Amish could be defined as "Folk Art" but not the art of someone like Martin Ramirez, a self-taught, outsider. "Outsider Art" and "Folk Art" are distinctly different. Quite often the "folk artists" will be as skilled or as trained within his or her tradition as the college educated artist working within the mainstream art traditions.
The Shakers, for example, would be a clear example of a sub-culture (a "folk") living within the larger culture, and yet outside of it. They have a tradition of masterful, almost Minimalist/Modernist furniture and architectural design:
Another example of such a "folk" community would be the isolated African-American community of Gee's Bend, Alabama. The women of this community developed a tradition of quilt-making that is quite different from that of the Amish, or other communities:
Folk Art has no set style but rather changes from community to community based upon the traditions of that community.
By way of contrast, "Outsider Art" is created by individuals... largely untrained and having little of no knowledge of the history of traditions of art... whose artistic endeavors are wholly outside of any community traditions. The art of the mentally ill falls under this category, but also the individual who creates art as a hobbyist or in his or her space time without any formal training or grasp of the artistic traditions.
Henri Rousseau falls into the category of "outsider artist" to a certain extent. He was aware of the art in the museums and sought to emulate it... however he was wholly self-taught and lacked the skills to paint in the manner of the artists he admired.
The institutionalized, Martin Ramirez drawing in crayon and pencil on the papers used to cover the tables during electro-shock therapy...
The mentally-challenged janitor, Henri Darger, who as an adult didn't even know that little girls didn't have penises, who created a grandiose illustrated epic that never went beyond the confines of his Chicago apartment...
and Madge Gil, who spent her childhood in isolation in an orphanage, who as an adult created thousands of drawings dictated (she claimed) by spirits...
These are all examples of true "Outsider Artists" as opposed to "Folk Artists".