The Problem with Labeling People

Using categories and diagnoses (or simply labels) has its place. It's a lot easier for instance, to say that you've been diagnosed with Kleptomania than it is to recite all of your symptoms time after time.
These labels were never intended to be hurtful or stigmatizing. People in the field of mental health developed diagnoses as a way of categorizing different mental health conditions. People with similar presentations (or collections of symptoms) were grouped together and given a label as a simpler way to describe a person's set of symptoms.
It was also useful in deciding what treatment approach to take. If a large group of people with the same symptoms were helped with a certain approach or medication, then that became an obvious starting point for another individual who came forward with the same set of symptoms. Likewise if a person came forward with a certain set of symptoms as another group of people and a particular medication was found to make the symptoms worse for those in the group, it would probably not be used with that individual.
Thus diagnoses were meant only to facilitate conversation, to help understand, and to assist in treating those dealing or suffering with a mental health condition. Although there are a number of different groups that have come together to form a tool for categorizing mental health conditions, the two most widely accepted worldwide are the DSM and the ICD.
Unfortunately over time many of these labels began to create a social stigma. Not fully understanding a diagnosis, many people began to draw false conclusions or make assumptions about individuals with a particular diagnostic label.
The Stigma with Mental Health
Whether referring to the term "mental disorder" or any specific mental health diagnosis we cannot escape the fact that these labels possess a certain emotional charge; and although things have improved over the years, that emotional charge or stigma is still more prevalent when we discuss mental health concerns than when we discuss physical health concerns.
It may be because physical ailments are often more visually noticeable than mental conditions. A person with a cast on their leg clearly has a physical condition that they're dealing with. We would not expect a person with a cast on their leg and crutches to help us carry boxes up a set of stairs. Yet when we encounter a person with a mental health condition, things are often different. We cannot see for instance signs of the Posttraumatic Stress Disorder that leads a person to be afraid to walk alone into a dark parking lot. The ailment is still there, but not having outwardly visible symptoms makes it harder for many people to understand and to appreciate.

But it's more than just that. There's also a societal perception that physical health conditions are somehow more real or legitimate than mental health conditions. As an example most people understand that if you have cirrhosis of the liver that you won't want to go to a bar. However if you have a substance abuse problem with alcohol the same people may not appreciate your desire to avoid the bar scene. It's as if they're saying to first person, "If your liver is at risk then we'll go somewhere else. It's not worth the risk." while at the same time saying to second person "just don't drink... nobody's forcing you!"
Many people have a difficult time appreciating the extent of and the impact of a mental health condition (whether a formal diagnostic label exists or not). It seems easier to sympathize with a person who is in bed because of the flu than it is to sympathize with someone who is in bed because they have agoraphobia and are afraid to go out in public. People seem to have an easier time imaging themselves in the position of a person who has a physical condition than a person with a mental health condition.
The Words we use Matter
Even the language that some people use points to a lack of sympathy and understanding. Phrases like "just get over it" and "suck it up" are used much more frequently with mental health conditions than with physical health conditions.
Additionally, a person with a mental health condition often takes on their diagnosis as the label is used almost to describe who they are as opposed to what they're dealing with. For example, a person with person Schizophrenia may be called schizophrenic. Consider the statement, "my Uncle Tim is schizophrenic". Most people wouldn't think anything about the way that sentence sounds. But would anybody say "my Uncle Tim is canceretic"?! They may say that Uncle Tim has a cancerous tumor, but they probably wouldn't say that Uncle Tim is cancerous!
With mental health conditions society often uses the label to describe the person as though the person is the label. A much more sensitive approach would be to phrase things in such a way that emphasizes that a person has a particular condition, not that they are a particular condition.
Instead of saying, "She's bipolar" we should say "She has Bipolar Disorder". Instead of "He's delirious", we should say "He has delirium". Instead of "She's bulimic", we should say "She has Bulimia". It's not unlike what we already do with physical conditions. We don't say "He's Lupetic". We would say, "He has lupus".
It may seem like such a small point that it must be irrelevant, but in fact it is not. By simply saying that a person has instead of a person is you can reaffirm that first and foremost they are a person. You are not your diagnosis. You are not your label. You are a person who just happens to be currently dealing with a particular condition (mental or physical). No matter what you may be dealing with you are and will always be a person.
Calling a person by a label (or by their diagnosis) can be dehumanizing, and yet because it's such a small thing, when most people call a person bipolar, anorexic, psychotic, etc. they simply don't realize the impact of their words.

As an analogy... would you rather be known by and referred to by your name or by your social security number? Would you rather be called by your name or by your race or ethnicity? While it's not exactly the same, these examples can give you an idea of what it can feel like to be labeled.
Over time you'd feel less like you. It's like taking away the things that make you unique and replacing them with a generic label. Not all Asians, Africans, Russians, or Canadians are the same and neither are all people with Panic Disorder, Obsessive-Compulsive Disorder, or Insomnia Disorder the same.
Being Russian or Canadian is just one part of who you are. You're also male or female, tall or short, thin or heavy. Likewise a person with Major Depressive Disorder may be tall or short, Christian, Jewish, or Agnostic, rich or poor, a custodian or an executive. In short, a mental health condition should be seen as just one part of who a person is as a whole.
Acknowledging the Problem
In the second edition of the Diagnostic and Statistical Manual of Mental Disorders, the American Psychiatric Association (APA) was already aware of the problems that existed with labeling. They knew for instance that some people might object to a particular condition being labeled a "mental disorder". In fact, they describe consulting and working with people holding a variety of views and perspectives and that it was not their goal to find a compromise, but simply to establish some terms about which people could later debate.
In the third edition, the APA expanded upon their recognition of labeling as being an imperfect instrument. They pointed out that use of the term mental disorder is imprecise, not to mention emotionally charged. They also stated that while it's difficult if not impossible to draw specific lines between what constitutes a mental disorder as opposed to a physical, emotional, or spiritual, disorder, that the term does help in deciding what conditions should and should not be included in their manual.
Although they recognized that a perfect definition for "mental disorder" may not exist, they chose to define it as a primarily psychological or behavioral condition that entails emotional distress or negatively impacts one's ability to function in some way. They also addressed the point made earlier stating that a label is often mistakenly applied to a person when it should instead be said that a person has a particular disorder.