The labels field allows you to attach one or more predefined tags to a card. For example: to indicate something should have priority or show a status.
You can add or remove tags at any moment by editing the card fields. Each tag can have an optional color which helps to quickly visualize cards having a quick status. For example: red tag "prio" grabs the attention.
Each card can have multiple label fields where each field has specific tags that can be selected when adding or changing cards of that type. You can use this to group sets of tags logically together.
The labels can be used to filter cards via the filter icon, or in the board view to group cards per tag.