A label is a cell that can maintain association to the element that is being labeled. If the cell definition contains fields, the fields will be updated based on the element being labeled. A label can maintain two types of associations. The first is regular association, in which if you move the element, the label remains at the same place, only the leader line moves along with the element. The second is relative association, in which the label will stay at the same location relative to the original snap point. That is, if you move the element the label will also move with it.
The Place Label tool is provided to place labels.