Joomla! Categories are used to logically group content-type data.
Every part of Joomla! powered web site or any CMS type of web site needs a method to display and store its content logically. The usual method is by categories and subcategories. Joomla! allows for multiple ways to display and use content controlled by categorisation. Some of the content types which have categorisation are articles (Main content of web pages), banners, contacts and web links.