These are really simple and quick to make and are a nice alternative to shop bought tags, they can also be used for labeling homemade wine, jam and other produce.
You can use most woods for these as long as the wood is seasoned, otherwise the tags may split as they dry.

Step 1: You Will Need...

Some suitable branchwood around 40 - 50mm (1.5" - 2") thick, Sycamore, Ash, Maple are all good but try to
avoid branches with a central pith or soft center as it could prove difficult to write on.
A saw - the finer the teeth the better = less sanding.
A drill.
A 4-5mm drill bit (dependent on the thickness of the twine/string).
Sandpaper.
Some suitable string/twine, I use Jute for a rustic, earthy look.
Appropriate safety requirements.

Step 2: First...

Cut slices from the branch at an angle of roughly 35 degrees (anyone know how to get a degree symbol on a PC keyboard?)
I use a bandsaw with a simple jig to keep a consistant angle, as I usually make around 20-30 at a time, but for just a few, any fine tooth saw will do - if using a handsaw, it is easier to clamp the wood in a vice or to a bench/table.

Step 3: Next...

Drill a hole at the end of the slice, but not too close to the edge where it could break.

Step 4: Now...

Now sand the slices, they don't have to be too smooth but maybe take off any sharp edges - I leave them unfinished but you could give them a coat of varnish if you want to, some finishes, such as wax could make them difficult to write on.

Step 5: And Then...

I use a pyrography tool to write 'To' and 'From' and then the recipient and sender can be filled in as needed, (A nail or something similar heated by a flame or gas ring would also do, an old screwdriver ground to a point is a good alternative).