The labels are a simple way to group resources that are connected or related to others.
For example you'll be able to label resources that are in production or in development then you'll be able to look for resources that are in this states separately.
https://cloud.google.com/compute/docs/labeling-resources
You can use labels when you create a resource in GCP but you can’t force the usage of these labels because not all the products support the labels feature.
You can have a look at the list of products that support the labels feature:
https://cloud.google.com/resource-manager/docs/creating-managing-labels#label_support