Directories are tags, and tags are directories. A file is considered tagged with a given tag if it has at least one hard link in the respective directory. The name of the hard link does not matter, and there can be more than one hard link for a file in a given directory.
Tags can be referred to interchangeably using the path to their respective directory, either relative or absolute, or by their tag qualifier (unless otherwise noted). Tag qualifiers are similar to UNIX paths, but are relative to their library's root directory and are preceded with two slashes.
For example, if the root of the library is /home/user/library, and the library contains a directory /home/user/library/foo/bar, the tag qualifier for that directory would be //foo/bar.