After you make a meme and are editing the title and tags, type in the tag box and existing tags will appear. You can click to use any of those, however as soon as you type something new, a never used tag, no tag will show up. Hit the enter key and there's your new tag, then finish by clicking update. After your meme features, that tag will show up in the existing tag list for you and other users.
One beauty of tags I noticed is it gets your meme to rise to the top of Google searches. If you search Google images for "Animal House Yoga" one or two of my memes with Bluto are near the top of the search results:)