what category do i fall under?

you know, humans are kind of funny. we do a lot of strange things. (i'm assuming that everyone who's reading this is human, though perhaps i shouldn't.) one of the strangest things we do is cast illusions.
and no, i'm not talking about pull-a-bunny-out-of-a-hat illusions. i mean we make ourselves think that certain things exist, even though they don't.
for instance, humans like to categorize everything. and by everything, i mean people.
in many minds, all people fall under certain categories. he is cool. she's a nerd. he is emo. she is a genius. he is an idiot. she is bad. he is good.
labels.
do these really exist? or did society just make them up?
i don't think that one word is adequate enough to describe anybody. people are so incredibly complex that it is impossible to completely describe someone with an entire book, let alone a single word. so why do we constantly do it?
why do we look at someone and immediately think, "that kid's a geek," or "that kid is cool"? what does it mean? and why do we feel the need to do this?
and what happens if someone doesn't fit any of the categories? is there a special "miscellaneous" label for him?
are all of us doomed to fit under a label? to be categorised like we're objects and not people?
and is labeling necessarily a bad thing?
what's up with it?