The <label> element is used to reference a form action element.
In the scope of User Interface it's used to ease the target / selection of elements like Type radio or checkbox.
<label> as wrapper
It can enclose the desired action element
<label>
    <input type="checkbox" name="Cats">
    I like Cats!
</label>
(Clicking on the text the target input will toggle it's state / value)
<label> as reference
Using the for attribute you don't have to place the control element as descendant of label - but the for value must match it's ID
<input id="cats" type="checkbox" name="Cats">
<label for="cats" >I like Cats!</label>
Note
Don't use more than one Control Element within a <label> element