You can add a tag to a group of contacts by selecting Bulk Actions, Apply Tags, select the tag and hit save.
You can also add a tag to a contact individually by selecting the tag number next to your contact. Then simply add a tag and save.
To remove tags from a contact, simply click on the Tags next to the contact, then hit the X next to the tag you want to remove.
To edit or delete tags throughout your contacts completely, go to Settings then Tags. Click on the options on the right to edit or delete.