Most projects have some kind of user interface, so we need to display text to the user, as well as the field names. The best practice way to do this is to use a label file. The label file contains a language-specific dictionary of label IDs and their translation.
Standard elements tend to have the legacy label IDs of an @ symbol, followed by a three-digit label ID and a number. This format has worked well for the past 15 years, but the prefix was potentially limiting, especially for aiding ISVs. Labels are no longer restricted to three digits, which helps Microsoft attain one of its goals of making ISV add-ons easier to write, maintain, and adopt.
The choice of how many and which packages need a label file depends on the solution design.
We tend to create a label file for each project as this ensures that the developer of the project can correct and change...