Labeling is a § Meditation technique in which you assign explicit labels to things you experience.
Labeling helps in sustaining attention and keeping yourself present.
It gives your mind a job to do, so it does not wander. This is helpful to deal with Monkey Mind.
It does not matter if you use the right label as long as it keeps you mindful. If you start thinking about what word to use, it is a hindrance.
Use labeling when it's helpful; drop it when it gets in the way of mindfulness.