It is mainly used to increase accessibility for users with sight problems. When a screen reader processes the page it needs to be able to read back to the user what the form fields are. If you don't use a label tag to link the title to the field the reader can't know what information the form field is looking for. We depend a lot on visual layout of forms but image how hard it would be for somebody without site to fill in complex forms if the fields are not tagged to a title using the
Defines a label to a control. If you click the text within the label element, it is supposed to toggle the control.
What this does is allow mouse clicks on the text as well as the control. Say you have a radio button labeled "Big" and another labeled "Small". This tag allows you to click on the text and it will fill the radio button.