A category is one of the basic taxonomies in WordPress. It is a way to group related posts by theme so that you can sort them on your website. It is very common for bloggers to use categories to organize their content into themes.
News sites are a great example of how to use categories to organize content. They divide up their content by type (Current Events, Traffic, Weather, etc) and use the categories in their menus so visitors can easily jump around.
In WordPress, you can also create menus and sidebars that are based on your categories. That way, you don't have to update all of your navigation every time you add a new post.
On my personal blog I have a few distinct categories to help users find what interests them. I have categories on investing, blogging, and golfing. It is amazing how many people come to my blog for the golfing information and end up reading my investing articles, too!
By default, WordPress creates an Uncategorized category that is automatically assigned to all new posts that you create. If you want more than that, we'll show you how to configure them in the rest of the page.
Before you can put a new post into a category, you need to create it. WordPress makes this really straight forward. Just go to the Posts menu on the left hand side and click on the Categories sub-menu item
Or, while editing a post you can click the Add New Category button.
This is the default text that will show up in menus and other places the category might appear. Make it something short and user-friendly. It can have spaces, but keep it short.
This is a URL-friendly (no spaces or weird characters) version of the category name. It will show up in the URL when browsing a specific category. If nothing is specified, WordPress will just convert your Name into a slug. Use hyphens to connect the words to make them human readable. e.g. 'blog-post-ideas' is better than blogpostideas.
This is rarely used unless you have a very large site and is used to create a hierarchy of categories. If you had a musical instruments category and wanted to be more specific with sub-categories such as woodwinds, brass, percussion, etc this is where you would set that up. You would first create the musical instruments category and then create all of the sub-categories that refer to the parent. Totally optional.
This field is never shown to your users. Fill in something here for your own reference if you think you need it.
Head over to Posts->Categories and you will see a menu underneath each existing category. You can change all the fields through the Edit link and even Delete categories you no longer want.
Deleting a category does not delete all posts in that category, they will get assigned to the default 'uncategorized' category.
Once the categories are created, it is easy to assign new posts (or edit old posts) to put them in a category. In the Edit Post page simply check the box next to the category you want to assign to the post. You can even have a post be in multiple categories if it makes sense.