Find the span class "entry-category"> in theloop.php.
Change <?php /* Categories */ printf(__('in ','k2_domain'), k2_nice_category(', ', __(' and ','k2_domain')) ); ?> to <?php /* Tags */ the_tags(__('in ','k2_domain')); ?>
I’m sure there’s a fancier way of doing this that doesn’t require the theme core files, but this is a relatively minor change.