First, it is imperative to differentiate the meaning of diagnosing and the meaning of labeling.
The dictionary (Webster's) definition of the word "diagnosis" shows a series of steps and attributes that are not contained in the definition of the word "labeling".
Hence "diagnosis" is defined as
The act or process of identifying or determining the nature of a disease by examination--a critical analysis.
Notice how special consideration is given to specific actions such as "identifying", "examining", "analyzing", and finally "determining".
Meanwhile, a "label" is defined as
An object serving as a means of identification; a descriptive term.
This definition entails, by comparison, that a label is merely used to identify something without digging deeper into the unique traits or characteristics that make an illness what it really is. In not so many words, diagnosing requires more in-depth analysis than labeling. In fact, the idea of "labeling" is often thought of as the lose attribution of traits without correctly analyzing whether those traits are consistent with every thing that is labeled in the same manner.
When it comes to diseases, a diagnosis is the final decision reached by clinicians who have tested, analyzed, and compared all the present symptoms for an extended period of time and with a significant amount of participants and subjects. They have also analyzed all the variables that are present in each case of the same diagnosis to determine whether a disease has mutated, or change its initial onset.
It is important to diagnose early because every disease is easier to manage when it has not spread or when its initial onset has not changed, or gotten worse.
Now, labeling does very little if it is not supported by a proper diagnosis. For example, just because a child has a high level of energy does not necessarily mean that the child is "hyperactive", or "ADHD" as some people are quick to ascertain. However if a child gets a proper diagnosis, and there are services in place for children who do suffer from a clinical case of hyperactivity, then labeling can help the child get the services that he or she needs.
Therefore, it is important to know the difference of diagnosing versus labeling. Nobody can diagnose, except if you are a clinician. However, anybody can label. The problem comes when people confuse both things and take someone's labeling as if it were a proper diagnosis made with the research tools that this practice often entails.