Grid labels provide a powerful means by which to visually categorise and filter your overall grid library.
For example, a professional services business might seek to colour categorise grids into "External" grids (service methods to sell to clients) and "Internal" grids (internal processes and operating procedures). Or, grids can be coloured by theme; for example, "Marketing", "HR/People", "Operations", "Finance" etc.
Each grid within your Method Grid library can be assigned up to eight coloured labels. Each of these labels (contained within your grid library label set/legend) can be bespoke named. See How do I edit the label legend for all my grids?
Each specific grid thumbnail (displayed within your grid library) can then display multiple such labels (up to maximum of eight). These labels are represented as coloured dots appearing on the bottom of individual grid thumbnails. It is, further, possible to assign one of these eight labels to be the primary label for the grid. This effectively colours the whole grid thumbnail to that label's colour.
As well as the powerful summary visual aid of such coloured labels, the assignment of labels allows users to quickly filter the grid library by assigned categories also. See How do I filter my grid library (by grid labels)?