Include dynamic tagging in drupal7 I just like the way the tags work out in stack exchange communities.  The way it gets description for each tag in a dropdown and key based tagging.

 

How come it works?? Do we need to use jQuery???

I just want to know whether these kind of tags can be developed in Drupal 7

Is there any module in Drupal 7 to make our tags appear like the one shown in the above image.
Drupal out of the box supports taxonomy and tagging using autocomplete. You need to create a vocabulary and add terms to the vocabulary.

Create a term reference field and choose widget as autocomplete.

Regarding making it look alike above you can consider this post.