Order Tags are used to add searchable filters to orders.
Here are a few common examples of Order Tags:
Waiting for Customer
Waiting for Payment
Order tags can be assigned to orders so you can use the search filter to easily find them:
You can Edit a Sales Order to add or remove tags:
In a similar fashion, tags can also be assigned to Returns and Purchase Orders.
Tags are managed under Settings > Manage Tags. Here you can add, edit and remove all tags.
You can specify tag colors and sort order.