Creating a label in Gmail helps to organize emails. Labels function as folders and multiple labels can be assigned to one message. Follow the steps below to create a new label. 

1. Select the messages you want to label. 
2. Click on the Label icon beside the More icon located at the top of the page. 
3. On the context menu click on Create New.
4. A New Label menu will pop-up. Create a title for the new label. 
5. If you wish to nest the new label as a sub label to a preexisting one, check the box against Nest label under and select a parent label.  
6. Click on Create.
7. The new label should now be created. 

To apply an existing label to a message, follow the instructions below.