GMail label is the tool in GMail to help you to organize your inbox, as there is no concept of folder in GMail. Label is akin to tagging or categorizing your emails, and Google wants you to [use more of it](http://googleblog.blogspot.com/2009/07/evolution-of-gmail-labels.html) as they introduced new label features in GMail.
We realized that if you didn’t know about labels, it would be easy to assume Gmail had no way to organize your mail. Not only were “labels” unfamiliar, they were kind of hidden. So, we set out to make labels more accessible, as well as more powerful. Most of the changes have been in Gmail for a while, but we’re adding some new features today. We thought you’d enjoy a peek at the method to our madness.
The new GMail label features are:
* Labels are now given prominent location on the left column, above chat list and grouped together with system labels such as Inbox and Drafts.
* GMail now automatically shows only labels you use the most and hides the rest. A “more” link gets you the rest of the labels. You can show or hide a label by clicking on the down-arrow to the left of the label.
![Gmail Labels New Position](http://sanziro.com/wp-content/uploads/2009/07/gmail-labels-new-position.jpg)
* You can now drag-and-drop to tag label to email items. You can drag from email items to labels on the left column, or you can drag the label to email item.
Source: [GMail Blog Post](http://gmailblog.blogspot.com/2009/07/labels-drag-and-drop-hiding-and-more.html)