See the question and my original answer on StackOverflow

This happens because when you click the 'Add' button in the Collection Editor (a standard editor for the property grid) it creates a new item using a supposed public parameterless constructor, which doesn't exist on System.String (you can't do var s = new String();).

What you can do though, if you want to keep the keepLabels property as is, is to create a custom editor, like this:

// decorate the property with this custom attribute  
[Editor(typeof(StringListEditor), typeof(UITypeEditor))]
public List<String> keepLabels { get; set; }


// this is the code of a custom editor class
// note CollectionEditor needs a reference to System.Design.dll
public class StringListEditor : CollectionEditor
    public StringListEditor(Type type)
        : base(type)

    // you can override the create instance and return whatever you like
    protected override object CreateInstance(Type itemType)
        if (itemType == typeof(string))
            return string.Empty; // or anything else

        return base.CreateInstance(itemType);