Each category has a parent category. This all is settled up to set a hierarchy. You can add new categories how much you needed to have. One thing that is kept in notice while creating a new category, is that it must have a unique name, whether they are under two different parent categories. They must have unique name.
When I am login from my WordPress admin panel, I can manage categories from here:
Whenever you are creating a new category, you are required to fill up following important things carefully
The Category Name must be unique.
The category slug must be unique. The Category Slug is used in the URL. For example, if I set Category Name “PHP Scripts” and a Category Slug of “scripts” would show all “PHP Scripts” posts with a URL like example.com/blog/scripts/.
Use this drop-down if you want to make this Category a sub-Category; you will select the sub-Category’s Parent here. For example, you may have a Category called “Photos” but want to add further clarification about the subject of a particular “Photos” post. You could add “Oregon Coast” and “Ice Storm” as sub-Categories to the “Photos” Category; “Photos” would be the Parent of these two new sub-Categories.
Sub-Categories show up on your blog’s page just like Categories, except they will typically be nested under their Parent Categories. When someone visits your site and clicks the “Photos” Category link, all posts in “Photos” and all its sub-Categories will be displayed. Clicking the “Oregon Coast” Category link only displays those post in that sub-Category. If you assign a post to a sub-Category (e.g. “Oregon Coast”), you can choose to assign that post to the sub-Category’s parent (“Photos”) or not. Either way, all “Oregon Coast” posts will show up in the “Photos” Category page. The only difference is that the list of Categories of which a particular post is actually a member.
Category Descriptions are optional