Source : Free On-Line Dictionary of Computing

label switching
     
         An attempt to combine the best attributes of
        {layer} two {switching} (as in {ATM} and {Frame Relay}) with
        the best attributes of the layer three {routing} (as in {IP}).
     
        The key concept in label switching is identifying and marking
        IP {datagrams} with labels and forwarding them to a modified
        {switch} or {router}, which then uses the labels to switch the
        datagrams through the network.  The labels are created and
        assigned to IP datagrams based upon the information gathered
        from existing IP routing protocols.
     
        Prior to the formation of the {MPLS} Working Group in 1997, a
        number of vendors had announced and/or implemented proprietary
        label switching.
     
        (1999-06-14)