Now search for below code within the html,
<a expr:dir='data:blog.languageDirection' expr:href='data:label.url'>
<data:label.name/>
</a>
</b:if>
<span dir='ltr'>(<data:label.count/>)</span>
And replace the above codes with below:-
<a expr:dir='data:blog.languageDirection' expr:href='data:label.url + "?max-results=2"'>
<data:label.name/>
</a>
</b:if>
<span dir='ltr'>(<data:label.count/>)</span>
The digit 2 in red in above code tell how many posts you want to show in label pages.So change it to any number as how much posts you want to see in your label pages.And if you have many posts in label pages and want to show all then use this hack how to