Google Drive offers folders (or collections) for organizing your files but doesn’t support labels or tags. A disadvantage with folders is that a file can only belong to a single folder while multiple #tags, as in Gmail, can be assigned to a single file.

There’s a workaround though. You can assign tags to a file in Google Drive by adding them to the description of a file. A Google forum user has written this Google Script that takes the folder name in which a file is found and assigns those names as tags to the file. It works for nested folders too.

/*
 setDescriptionToFolderNames
 Workaround to fake Tags in Google Drive.
 Writes all the folder names of a file into the file description, so that the file can be found by searching the folder names.
*/

function setDescriptionToFolderNames() {
  var file;
  var filename;
  var folders;
  var filedescription;

  var contents = DocsList.getAllFiles();
  // sort ascending. Oldest first, in case of timeout:
  contents.sort(function (a, b) {
    return a.getLastUpdated() - b.getLastUpdated();
  });

  // synchronize folder names of all files (only updates if folders have changed):
  for (var i = 0; i < contents.length; i++) {
    file = contents[i];
    try {
      filename = file.getName();
      //Logger.log("Checking: " +filename +" ("+file.getLastUpdated()+")");
      folders = file.getParents();

      // sort by folder name:
      folders.sort(function (a, b) {
        return a.getName().localeCompare(b.getName());
      });
      filedescription = '';

      for (var f = 0; f < folders.length; f++) {
        filedescription = filedescription + folders[f].getName() + ' ';
      }

      if (filedescription != contents[i].getDescription()) {
        file.setDescription(filedescription);
        Logger.log('Updated: ' + filename);
      }
    } catch (e) {
      Logger.log('Error: ' + filename + ' ' + e);
    }
  }
}