Custom Label may be more popular for developers to store a variable, but Custom Label actually also available for system administrator to be used in formula field, workflow rule, and validation rule. For a formula field that refer to custom label, value of the formula field will be depend on value from custom label referred, when display in page layout or report, it will be displayed based on language selected in user detail.
To create Custom Label, click Setup | Create | Custom Labels. You only can add translation language based on languages supported in your Translation Workbench.
Once created, you can find Custom Label in Global Variable start with $Label
Once added in formula field or other places, it will show with format $Label.Label_Name
Custom Label enable developers to create multilingual applications by automatically presenting information in a user's native language from Apex class or Visualforce page.
For Apex class, it would be just a simple as: String strMyLabel = Label.Hello;
Note: if you want to set Custom Label in multi-language, you need to enable Translation Workbench. To enable Translation Workbench from Setup | Translation Workbench | Translation Settings, then add and activate languages that you need.
Reference: Custom Labels
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