The following is as much a learning experience for me
as it may be for you, as I come to an understanding of a definition with which I was previously unfamiliar — Stem Taxa in the ‘wider sense’. There is also a ‘narrower sense’, with which I was more familiar (see below).
Stem taxa in the wider sense
are extinct taxa closer to one clade of living taxa than to any other living taxa. In more precise terms, according to Wikipedia: “A stem group is a paraphyletic group composed of a pan-group or total-group, above, minus the crown group itself (and therefore minus all living members of the pan-group).”

Figure 1. CLICK TO ENLARGE and retrieve a PDF file. Stem taxa are the closest ancestors to living taxa, but not the living taxa. Here in the wider sense marine enaliosaurs, including ichthyosaurs, are stem archosaurs. Triceratops is a stem bird. Diadectids are stem turtles. Pterosaurs are stem squamates.
The stem reptiles
in the LRT (Fig. 1, click here for PDF enlargement) are not the same stem taxa found in traditional studies, like Benton 1999, who includes pterosaurs among the stem birds. In the LRT (Fig. 1) pterosaurs are stem squamates, not squamates, but closer to squamates than to Sphenodon, the extant tuatara. Stem amphibians are not listed here, because the only listed extant taxon in that clade is Rana, the bull frog. Here plesiosaurs, ichthyosaurs and mesosaurs are all stem archosaurs. All dinosaurs are stem birds. Diadectids are stem turtles.
Paleontological significance
According to Wikipedia, “Placing fossils in their right order in a stem group allows the order of these acquisitions to be established, and thus the ecological and functional setting of the evolution of the major features of the group in question. Stem groups thus offer a route to integrate unique palaeontological data into questions of the evolution of living organisms. Furthermore, they show that fossils that were considered to lie in their own separate group because they did not show all the diagnostic features of a living clade, can nevertheless be related to it by lying in its stem group.” Unfortunately, these benefits get fuzzier as the phylogenetic distance increases.
Stem group: the narrower sense
According to Wikipedia (referencing Czaplewski, Vaughan and Ryan 2000), “Alternatively, the term “stem group” is sometimes used in a narrower sense to cover just the members of the traditional taxon falling outside the crown group. Permian synapsids like Dimetrodon and Anteosaurus are stem mammals in the wider sense but not in the narrower one. From a cynodont ancestry, the stem mammals arose in the late Triassic, slightly after the first appearance of dinosaurs.”
That narrower definition
is the one I was following and is certainly more useful, more targeted, etc. Since both definitions are in play in the wider world, be sure you specify which one you are discussing. Dr. Naish embraced the wider one while ignoring the narrower one.
And that’s okay.
References
Benton MJ 1999. Scleromochlus taylori and the origin of the pterosaurs. Philosophical Transactions of the Royal Society London, Series B 354 1423-1446.
Czaplewski TA, Vaughan JM and Ryan NJ 2000. Mammalogy (4th ed.). Fort Worth: Brooks/Cole Thomson Learning. p. 61.
wiki/Crown_group#Stem_groups