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A topical song is a song that comments on political and/or social events. These types of songs are usually written about current events, but some of these songs remain popular long after the events discussed in them have occurred. Typically, these songs offer a mix of narrative and commentary, although some (such as Neil Young's song "Ohio", reacting to the Kent State shootings) assume that the events are so well known that only commentary is called for.
Topical songs are often (but needn't be) protest songs. Two examples whose titles should be self-explanatory in this respect are "Talkin' John Birch Paranoid Blues" by Bob Dylan (c. 1963) and "The Marines Have Landed on the Shores of Santo Domingo" by Phil Ochs (1965). However, they may also celebrate the events described, such as the 1936 calypso "FDR in Trinidad" (a.k.a. "Roosevelt in Trinidad") recorded by several artists in Trinidad at the time (probably most famously by a singer who went by the name Atilla) and covered decades later by Ry Cooder, or Joni Mitchell's "Woodstock", about the Woodstock Festival.
Generally speaking, one would call a song "topical" only if the events referred to were at least reasonably recent at the time the song was written. Thus, Al Stewart's songs about historical events are generally not considered topical. However, "Biko" by Peter Gabriel, written in 1980, three years after Steve Biko's death in a South African prison, would generally be considered topical because the anti-apartheid struggle of which Biko was part was still in full flower when the song was written. Tom Paxton's 1978 song "The Death of Stephen Biko" is an earlier topical song about this incident. Paxton is one of many topical songwriters who emerged from the acoustic folk genre, and he has been recording songs and commenting on events in the news since the early 1960s.
Tom Lehrer's 1965 album That Was The Year That Was consisted entirely of satirical topical songs on topics ranging from Nuclear proliferation ("MLF Lullaby") to the Second Vatican Council ("The Vatican Rag"). He originally wrote these songs for the television show That Was The Week That Was; most of them were written and first performed in the very week of the events referred to. The album also contains a song — "Folk Song Army" — which takes a satirical look at protest songs.