Labels and tags are one of the more under-utilized features of the macOS file system. Perhaps folks don't want to color-code their files or spend the time to apply a tag to a folder, but since you can sort list view windows by label or tag or search for items based on label or tag, it can be a mighty useful file management tool.
To assign a label or tag, select the file you want to assign the label to. Then from the Finder's File Menu, choose the color of the label you wish to apply or choose "Tags..." to see a list of options. If you'd like, you can also create your own Tags on the fly.
For a complete tutorial and Labels and Tags, see iMore's article.
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