I don't use tags.

Might it be doing something stupid like sorting alphabetically on the tag names?

No not alphabetical. And I've just added another one and it's now sorting: 1, 3, 4, 5, 7, 6, 2.

If I use the 'Tag' column header to sort emails with tags, then it sorts alphabetically either A-Z or Z-A; not in the order the tags are actually listed/created.

so if I created tags in this order and this is how it appears if I select the 'Tags' icon on the 'Mail Toolbar' or right click on email >select 'Tags':

1. Important
2. Work
3. Personal
4. To do
5. Later
6. Done

then when I sort by using the 'Tags' column header, they will be sorted as: 6,1,5,3,4,2 or 2,4,3,5,1,6

Yes you're correct. And apologies to Zenos as well. They ARE sorting alphabetically. I was put off the track because of some symbols in my Tag names (parentheses and dashes). It does seem silly that the Tags obviously have a number, but it can't be edited and it isn't used for sorting. I have worked around it by adding number prefixes to the names, so in your example the actual Tag NAME would be "1. Important", regardless of its number.