When biologists say an animal is "basal" does this mean:

* the animal has more traits found in extinct animals than its close relations
* the animal is taxonomically isolated on a branch with few leaves
* because the animals is taxonomically isolated it may have traits of extinct ancestors of a clade lost in most other clade members

I've seen it used in all of these ways. Is the isolation key? Or is it being similar to the ancestor that matters more?