The concept of labels is Gmail’s way of handling mail folders. The difference between labels and traditional folders is that a message can only be stored in one folder at once, whereas multiple labels can be applied to a message, allowing it to be filed in multiple contexts. Gmail extends this concept by even making the inbox a label, as well as
starred messages and important messages (as viewed in the Priority Inbox).
Note that it is not possible to create new labels or remove them within the Gmail app for Android. However, labels can be applied to messages. To do so, open a message in Gmail and open the menu by tapping the three-dots icon at the right-hand side of the top row of the screen. Next, tap on Change Labels. On the following menu, you may tick or untick all of the desired labels in the list. When you have set the desired labels, tap the OK button. You may view the contents of each label by swiping in from the left of the screen and tapping the desired label.