Paleoendemism along with neoendemism is a possible subcategory of endemism. Paleoendemism refers to species that were formerly widespread but are now restricted to a smaller area. Neoendemism refers to species that have recently arisen, such as through divergence and reproductive isolation or through hybridization and polyploidy in plants.
Etymology.
The first part of the word, paleo, comes from the Greek word "palaiós, meaning "ancient"." The second part of the word, "endemism" is from Neo-Latin "endēmicus", from Greek ενδήμος, "endēmos", "native". "Endēmos" is formed of "en" meaning "in", and "dēmos" meaning "the people".
Causes.
Changes in climate are thought to be the driving force in creating paleoendemic species, generally due to habitat loss. Regions where the climate has remained relatively stable form refugia which are more likely to be endemic hotspots today. This applies to both neoendemism and paleoendemism. However, paleoendemism differs as it does not require additional factors such as barriers and ecological opportunities as it does not rely on adaptive radiation like neoendemism does. It instead relies on the instability of other regions' climate, which may limit the range of a species to a more stable region, thus turning that species paleoendemic. Limited ability for dispersal is also important in the creation of endemic species. The two terms can essentially be defined as "cradles" of new species (neoendemism), or "museums" of old species (paleoendemism).
Examples.
It is not always clear whether a particular species is paleoendemic or neoendemic.
Ginkgos are a paleoendemic genus. From the Mesozoic to the mid-Cenozoic, these trees could be found throughout the world. However, today, they can only be found in China in the wild.
Several examples occur in plants native to the southeastern United States: 
Paleoendemism on islands.
Islands as harbors for endemic species are explained by the theory of island biogeography. However, in order to be considered a paleoendemic on an island, the species must have had a widespread distribution previously, thus eliminating newly formed islands as potential refuges of paleo-endemics.