The Gallery has an option to group photos by "People" and "Tags". Does anyone know how to set these tags? There doesn't appear to be a feature to tag photos taken with the phone's camera, and I've tried copying an existing tagged photo onto the phone (both via MTP and email) and the tags were ignored.
You need to have a Picasa account (which is auto-created if you have a Google+ account) and also have Sync Google Photos turned on (which is automatically on if you have Google Sync turned on.)
Share your photo with Picasa.
Go to Picasa Web Albums at https://picasaweb.google.com/home and find your photo.
In the right-hand margin, you'll see Tags and a "+" button with a Tag icon.
Click that button, which is the Add Tags button.
Enter your tags, which are space separated.
On your Android device, go into Gallery and go up to the top level using the Up caret in the upper left, which is the left-most side of the action bar.
It should refresh automatically. If not, you can manually choose "Refresh" in the menu in the upper right. This is what syncs the tags that you created on the web to your Android device. (Sync Google Photos is what really does it under the covers.)
Now you can choose the album that has the photo that you tagged above.
Then choose the menu item Group by > Tags.
Voila! You can now see your photos grouped by tag.
Picasa Web tagging is documented at: http://support.google.com/picasa/bin/answer.py?answer=55851
Sync Google Photos is documented at: http://support.google.com/mobile/bin/answer.py?answer=2395276