Any word which has any possible connotation of 'false/imagination/fiction/lie' must not be used when referring to our scriptures.
Itihasa, Purana & Scripture are enough to categorize most mythology questions. For remaining, we can deal on case by case basis. Within those two, we have 2 itihasa + 18 purana = 20 different tag options for detail.
Here are definitions of alternate words proposed earlier, and why they are all bad :
Myth:
a traditional story, especially one concerning the early history of a
people or explaining some natural or social phenomenon, and typically
involving supernatural beings or events.
a widely held but false belief or idea.
Mythology:
collection/study of myths
So, @KeshavSrinivasan's comment :
And by the way, while the word myth has these two disparate meanings
in English, the word mythology has only one meaning and that is
related to the non-pejorative usage of the word myth, i.e. "a
traditional story, especially one concerning the early history of a
people or explaining some natural or social phenomenon, and typically
involving supernatural beings or events."
doesn't seem to have google's blessing - since mythology is just a collection of myths, it could mean a 1. collection of facts, or 2. collection of lies.
Legend:
a traditional story sometimes popularly regarded as historical but
unauthenticated.
Story:
an account of imaginary or real people and events told for
entertainment.
Epic:
a long poem, typically one derived from ancient oral tradition,
narrating the deeds and adventures of heroic or legendary figures or
the history of a nation.
Since all this confusion arises with English translations, we still need a word to denote stories but which doesn't have the common negative connotation as imaginative fiction, so my suggestion is to use the original Sanskrit word
Katha
Why do we even need tags anyway.. They're just an additional piece of information. Keep in mind, this stackoverflow site was created for programming questions with so many different languages, so that people can get alerts for specific tags relating to their expertise. Even if we get rid of the tagging practice on HSE, it won't affect much.