This is the third in a series of papers attempting to describe a uniform geometric framework in which many integrable systems can be placed. A soliton hierarchy can be constructed from a splitting of an infinite dimensional group $L$ as positive and negative subgroups L_+, L_- and a commuting sequence in the Lie algebra of L_+. Given f in L_-, there is a formal inverse scattering solution u_f of the hierarchy. When there is a 2 co-cycle that vanishes on both subalgebras of L_+ and L_-, Wilson constructed for each f in L_- a tau function tau_f for the hierarchy. In this third paper, we prove the following results for the nxn KdV hierarchy: (1) The second partials of ln(tau_f) are differential polynomials of the formal inverse scattering solution u_f. Moreover, u_f can be recovered from the second partials of ln(tau_f). (2) The natural Virasoro action on ln(tau_f) constructed in the second paper is given by partial differential operators in ln(tau_f). (3) There is a bijection between phase spaces of the nxn KdV hierarchy and the Gelfand-Dickey (GD_n) hierarchy on the space of order n linear differential operators on the line so that the flows in these two hierarchies correspond under the bijection. (4) Our Virasoro action on the nxn KdV hierarchy is constructed from a simple Virasoro action on the negative group. We show that it corresponds to the known Virasoro action on the GD_n hierarchy under the bijection.
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