Tags was a feature added to Finder in Mavericks, and when used properly it’s a great way to trying to keep all your content organized and easy to find. The problem however, is that the tags themselves are not organized. You can tag something with the color red, but what does the color red represent?
Changing the name of the tag helps you remember what’s actually being tagged. Changing the color can emphasize the tag, for example; red is attention grabbing so maybe it would work well as the “Important” tag or deadline tag.
Change Tags Name & Color
There are two ways of changing the name and color. One way is through Finders preferences and the other way is by simply right-clicking on the tag in the sidebar.

The easiest method is to just right-click the tag in the sidebar, from here you can quickly change the name and color of it.
The preferences method gives a few more options. While you can rename and change the color, you can also change which tags show up when you right-click on files.

Right-Click Favorites
Normally while in Finder you can just drag a file or selection of files onto the tag that you want to add it to. If you’re working outside of Finder and want to right-click a file or folder to add to a specific tag, you would right-click and select the desired tag. But what if your desired tag isn’t there?
In the Finder Preferences window there is a favorites section under the tags tab. This area is used to modify the tags that are available from the right-click menu. Drag tags down to the favorites area and arrange them in the order that you’d like and they will show up when right-clicking files and folders.
Is there a way to add new colors to the standard seven built into Mavericks?
No, unfortunately I don’t believe there is a way to create new colors.
is there a way to show 4 colours instead of 3 next to the file name?
This is not a complete solution, but Apple app store has apps for color coding your folders only, that you can purchase. None for the documents or files. I loved the old OS that had the color wheel and basically you could make all your documents, files and folders any color you wanted. Why does Apple always mess with the things their customers love? I just don’t understand their way of thinking! Being that the newer OS is more advance, a color wheel should be a given!