There are two options how to create a tag structure, both are equivalent:
Here you can setup new tag structure, edit or delete it and have a overview of all tags in your project along with number of labeled references.
You can easily setup new tag structure in this editor. A number of subcategories can go up to Level 5.
After saving, the tags are ready to use with your references. They appear in the reference detail under the Tags tab, where you can immediately select tags to label your reference.
In case you want to have an overview of assigned tags and see just the selected tags, select the View.
To assign a tag to more references at the time select references (search/filter) you want to be labeled and use Bulk operations.