Element labels provide a powerful means by which to visually categorise elements within a grid. 

For example, a service methodology based grid might have elements colour labelled as either "Mandatory" - or - "Optional".

Each grid can have its own unique label set/legend and each element within a grid can be assigned up to eight coloured labels.

Each of the labels within your grid's label set/legend can be bespoke named. See How do I edit the element label legend for a specific grid?

Each specific element (displayed within your grid) can then display multiple such labels (up to maximum of eight). These labels are represented as coloured dots appearing on the bottom of individual element thumbnails. It is, further, possible to assign one of these eight labels to be the primary label for an element. This effectively colours the whole element thumbnail to that label's colour.  See How do I add/manage labels within a specific element?