I see that I can add blank color labels to cards but does Trello support the ability to have Tags. I see on the Trello team's board there are cards that say "Bug" or "Feature" but I can't figure out if they are doing this through Tags and if so, how I can do this on my Trello Board.
You can give the coloured labels meaningful names, which I've found really helps.
It's not entirely obvious how to do this, at first:
Now, when you click on a card, and then "Labels...", the name you specified is displayed on top of the Colour swatch.
This at least saves people from having to remember the meaning you've ascribed to the different colours.
You still only get 6 colours to play with, though, and I don't believe that you can change the colours themselves.
Other nice tricks
I've just noticed that there's now a shorter route to renaming labels: At the bottom of the list of labels, there is now a link to "Edit labels (sic) titles":
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