A label is like a "flag" under which musical artists operate. Imagine that the music industry is a large marketplace where each seller has their own tent with goods. So, a label is the tent under which artists release their music.
When we talk about what a label is, we mean a company that helps artists record, release, and promote their songs. They act as mentors for young talents, helping them find their audience. A label can also help define the style of music. For example, if a label specializes in electronic music, all its artists will work in that direction, forming a recognizable style.
Imagine there is a label that specializes in rock music, like Universal Music Group. All the musicians signed there will most likely create music in this genre. This is how a label influences the style and development of an artist, like a caring coach in sports.