Labeling Wires

Try using the label books that electricians use to label their wires.  Home Depot and Lowes both sell them in the electrical section.  The labels are numbered and lettered.  They adhere well to wiring.  

You can use a piece of 1" blue or green masking tape and wrap the tape around the wire and then use a Sharpie and write on the tape what the wires are for.

Dan's above idea will work also.

Indelible colored markers would work on gray wire.

For photos and more see Toy Train Layout Wiring - Wire Management.

You can buy heat shrink tubing in almost as many colors as wire. Buy the appropriate size and heat shrink it on the ends over whatever terminal you crimp on.

Electric tape is the same thing, I find heat shrink is a little cleaner and more permanent. 

I decided a couple of months ago to start printing sheets of wire labels on my printer.    I am building a layout that is currently 23 x 20 with another 20 x 20 section to go.... 

 In spite of my best planning efforts I still couldn't find enough different color wires.  With over 30 switches so far, 39 block signal heads, track power, different accessory power for building lights, uncoupler tracks etc...   Honestly I really like the printed out labels which tell me exactly what the wire is.   I have only run into to a few issues, but it has definitely made it alot easier to identify an issue with written out labels attached the wire with clear packing tape.    

It's amazing how when you start you don't think there is going to be that much wiring, then the switches/switch machines, block signals with signal relays, isolated rail sections for block signal control, crossing signals/gates, switched track power on sidings and spurs, building lights/street lights and on and on and on !!!

I print the labels in 12 to 14 point Arial type font, some labels are 2 rows, but I don't have to stress when I go under the table on my creeper to add or change something. 

On my layout all track power is red wire, accessory power is white, and operating accessory power is yellow, with black for ground (common ground wiring). Being as such I have quite a bit of duplicate colored wire. I just tag each end of the wire with what it does/goes to for future reference. I've got 15 track power blocks so I need to know what all those red wires do 😉.

I agree with DAN PADOVA post.  Buy a label book I use them no problems.

Brady Label Maker

I use this to label all my wiring. It’s a bit spendy but I have like 1000 feet of Eire and it’s sll very well labeled and easy to troubleshoot.