Tags allow you to attach metadata to objects in the vSphere inventory to make these objects more sortable and searchable.
A tag is a label that you can apply to objects in the vSphere inventory. When you create a tag, you assign that tag to a category. Categories allow you to group related tags together. When you define a category, you can also specify which object types its tags can be applied to and whether more than one tag in the category can be applied to an object. For example, if you wanted to tag your virtual machines by guest operating system type, you could create a category called 'operating system', and specify that it applies to virtual machines only and that only a single tag can be applied to a virtual machine at any time. The tags in this category could be "Windows", "Linux", and "Mac OS".
If multiple vCenter Server instances are configured to use Enhanced Linked Mode, tags and tag categories are replicated across all these vCenter Server instances.
Tagging replaces the custom attributes functionality found in previous versions of vCenter Server. If you have existing custom attributes, you can convert them into tags.