The options you need to manage your Tumblr tracked tags are quickly accessible as soon as you log in to the site. There are several benefits to deleting tracked tags you're no longer interested in: fewer tags leads to less clutter on your dashboard and if you're tracking less than 20 tags, you can see how many new posts have appeared for each one.
Removing Tracked Tags
From the Tumblr dashboard, click inside the Search Tumblr box or press the "Tab" key to bring up your current list of tracked tags. Select the tag you want to remove, and the latest results for this tag show up on screen. Click "Untrack this tag" to remove it from the list -- the next time your tracked tags appear on the dashboard, this tag will no longer display.