I was about to call this a problem, but upon further review, that seemed rather one sided. What I'm referring to is the human survival mechanism I call labeling. While we don't fully understand the capacity and mechanism of our own brains, I'll say from experience that thoughts are easier to process and take care of when they are simpler. That's my theory as to why we name things.
It is very likely more enriching to go about in the world just observing, and restraining judgement upon the people and things one encounters, but the fact of the matter is, in waking consciousness most humans don't have the mental bandwidth to process their environment as such and also respond to potential external threats and hazards. We take shortcuts by building mental structures that encapsulate our understanding of a person, object, or phenomenon and then associate those mental structures with a name, or label. This label is like the key to a mental hashtable that allows the brain to jump straight to one's preconceived notions about said label any time it is triggered, either directly or association. Let me stress that I think this is good as a survival mechanism. It allows humans to evolve quick, intelligent reactions to rapidly changing threats, like tigers.
The issue I take with the idea of labelling is rather how it limits our way of thinking and communicating with others. The first issue is that labels are not uniformly built, harbored, or agreed upon. While you and I may use the same name for 'temperate', or 'freedom'. or 'justice', what that maps to in each of our brains is not fixed and almost guaranteed to differ. So the first issue is really a miscommunication -- someone refers to a concept, and your mental structures for that concept differ from theirs, so you have a incomplete understanding of their message. It turns out, this problem has affected linguists for many years.
The second, and main issue that I take with this concept is that it stifles further thought and potential insight upon labeled entities. Once you call something "something" and put it in it's little box, then that's the lens it will be seen through. This is especially dangerous when that label has a mass negative knee-jerk reaction in a society -- "Socialism" for instance. Once the world is all packaged up and put in these little boxes and neatly labeled, it sure becomes easier for us to understand, but at what cost. Thinking we know a thing or two about a thing or two is our greatest folly. The world is out there and changing constantly. The way out of the darkness is to realize that we don't know how the world works and as long as we think we do, we'll continue to not know. It's only when we choose to shed our preconceived notions, our labels, our mental conveniences and justifications that we will begin to see the world as it truly is -- far beyond what we can keep in our little heads.
So before you wad this post up and throw it in your hippie bullshit bin, know that only limits your own understanding and anyone else you happen to convince.