'The priesthood of all believers' has been a term that has been used a number of times in our little UK Methodist blogosphere.
I'd like to offer a few thoughts on this term. I say 'offer a few thoughts' because I'm not purporting to offer a rigorous academic definition of the term, simply my own personal thoughts.
1) A priest is normally understood as being a human being who has a 'mediating' role between God and humanity. The term 'priesthood of all believers' indicates that it is through 'the Church' that this mediation takes place.
2) 'The Church' is a fraught term over which generations of Christians have disagreed. I take a fairly Protestant view of 'the Church' regarding it as a mystical communion of believers (although I leave it to God to judge who is in and who is out).
3) 'The Priesthood of all believers' therefore indicates that the communion of believers plays some kind of 'mediating' role in the life of the faithful. For me as a Methodist, the concept of 'fellowship' is important to my understanding of that mediating role. For me, there is something important about the Christian community and our mutual encouragement and oversight of each other as well as about our commitment to self-giving love, to forgiveness and to reconciliation.
However, there are also a few things that 'the priesthood of all believers' is not.
a) It is not a theory that implies that every individual member is called to all the functions of the ordained ministry and that each member might as well do all or any of them instead of a minister. Normally speaking, one would assume that any individual called to most of the functions of an ordained minister might have a calling to such a ministry. It might very well be the case that, in any given congregation, there are some individuals with this calling. The Church historically has asked them to step forward, offer themselves and be recognised by the Church if they want to exercise them. This was Wesley's concern about 'order' in the church.
b) It is not 'rule by the loudest members.' It does not mean that when any member of the congregation says 'Jump!' that other members or the minister say 'Yes sir! How high?' In any other group or institution, individuals demanding that all their desires be met would be called anarchy. Of course, the prescription against autocracy goes for the minister as well as for members.
c) It is not unique to Protestantism and it doesn't imply congregational church governance. The Roman Catholic church would also claim to believe in 'the priesthood of all believers'. It does, however, have a very different view of 'church' and of what I would call 'the institutional church', of the meaning of ordination and of the role of an ordained priest.