Categories are like genres for your content that help your customers easily identify the type of content on your catalog page.
For customers to see any of your videos they must be added to a category since your catalog displays content organized by category.
If you're running a fitness channel you might have your videos organized by cardio, lifting, or nutrition.
Now if you're wondering about the difference between categories and collections, well collections are a way to group videos that are meant to be viewed in a specific order, something like a 10 day yoga challenge, a bread making class, or a step by step guide on setting up a recording studio. Take a look at our collections article for a detail explanation on collections.