From the challenges file
<challenge name="harvestPolymers" title_key="challengeHarvestPolymers" icon="ui_game_symbol_challenge_harvesting_polymers" group="Harvesting"
short_description_key="challengeHarvestPolymersShort" description_key="challengeHarvestPolymersDesc"
reward_text_key="challenge_reward_500xp" reward_event="challenge_reward_500">
<objective type="Harvest" held="meleeToolRepairT0StoneAxe" required_held="true" item="resourceScrapPolymers" count="50" block_tag="challenge_barrels" override_tracker_index="challenge_barrels" track_distance="50"/>
</challenge>
From the blocks file
<block name="cntBarrelPlasticSingle00">
<property name="IndexName" value="challenge_barrels"/>
<property name="Material" value="MFuelBarrelPolymer"/>
<property name="Shape" value="ModelEntity"/>
<property name="Model" value="Entities/Industrial/barrelPlasticPrefab"/>
<property name="WaterFlow" value="permitted"/>
<property name="Place" value="TowardsPlacerInverted"/>
<property name="Collide" value="sight,movement,melee,bullet,arrow,rocket"/>
<property name="Path" value="solid"/>
<property name="IsTerrainDecoration" value="true"/>
<property name="CanDecorateOnSlopes" value="false"/>
<property name="SellableToTrader" value="false"/>
<drop event="Harvest" name="resourceScrapPolymers" count="2,4" tag="allToolsHarvest"/>
<drop event="Destroy" name="resourceScrapPolymers" count="2,4" tag="oreWoodHarvest"/>
<drop event="Fall" name="resourceScrapPolymers" count="3" prob="0.3" stick_chance="0"/>
<property name="SortOrder1" value="B260"/>
<property name="SortOrder2" value="0600"/>
<property name="Tags" value="challenge_barrels"/>
<property name="FilterTags" value="MC_building,SC_loot"/>
</block>
So to answer your question - Index
Tags are used to indicate which blocks are part of the challenge.