Tags allow you to organize your content in multiple dimensions in addition to the traditional folder structure.
Tags allow you to categorize files in multiple dimensions and it is intended as a complement to the traditional hierarchical folder structure. That way you can easily organize and find files in multiple ways.
This will allow you to structure documents in a numerous ways. You could for example define a list of standard documents (internal memo, proposal, model etc.), by department (sales, marketing, legal), clients or area of expertise (healthcare, industrials, financials). This way you can find files or documents associated with teams, departments, workstreams, projects, clients etc.
You can also apply multiple tags to a document.
The tags you and your organization use can be seen and browsed in the left-hand tab.