Craft treats all element types as equal: assets, categories, entries, tags and users. This means that each of these element types can have their own set of custom fields.
In practice, you may well not need to create custom fields for things like tags or categories, but it's useful to be able to add them if you need to.
The field layout for a Tag is used for applying custom data fields to each tag, such as a description, not for storing the name of the tags.
To use tags in your Craft site, you must first create a tag group for each different group of tags you want to use.
Next, add a tags field and assign it to the entry types that you want to tag.
Now, when you are adding the content for each entry, you will be able to add a relation to the tag you want to assign to that entry by clicking the plus button in the tags field and typing the name of the tag you want to assign to the entry. As you type a pop-up menu appears showing you the matching existing tags in the system. The last entry in this menu adds the current typed name as a new tag to the group.