A tag is a label you stick on a conversation — VIP, Refund, Follow up. Note the word conversation: tags mark chats, not contacts, which is the thing most people get the wrong way round.
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What a tag is and where it goes on
This list is the set of labels your team can reach for. They're applied in two places, neither of them here: an agent adds one from the Tags section of the contact panel while reading a chat, and a chatbot can drop one on automatically with its Set Tags step — which is the interesting one, because it lets a flow mark its own outcome, so every chat that fell out at a certain question ends up labelled without anyone thinking about it. Agents can also invent a tag on the spot from the inbox, and it joins this list automatically. That's convenient and it's also why this page drifts: it fills up with whatever people typed at the time, which is exactly what it's for you to tidy.
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Tidying the list
Renaming reaches every chat carrying the tag, so correcting a spelling fixes it everywhere rather than stranding the old label on old conversations. Deleting is where you find out how far a tag actually spread: the confirmation counts the chats for you first — "VIP is on 34 chats. Deleting it removes the tag from those chats too" — and it means it, because the label comes off every one of them and there's no undo. That prompt is worth reading rather than clicking through, since it's the only place the number is shown. A tag on nothing is free to remove; a tag on hundreds of chats is a decision. When two tags mean the same thing, rename one to match the other rather than deleting it — renaming keeps the chats, deleting strips them.