After using branches for a while you notice that you also need a different kind of reference:
You want a reference that always points to a certain snapshot, and never moves.
You want to use these special references for labeling certain “important” snapshots, like “Version 1.0” and “Version 1.0.1”.
Since they don't behave like regular branches, you decide to call them “tags”, and store them in a separate file, so that you don't accidentally treat them as a regular branch.