Categories are the topmost level for organizing your products.
Once you create your categories you can assign subcategories to them (if you've chosen to have them). You can also assign products directly to categories.
If you chose to use categories for your catalog structure in Global settings then Categories will appear under Apps / Catalog / E-commerce System. You can add as many categories of products as you want. Once a category has been created you can assign subcategories (if you've chosen to use them) or products directly to it.
After you click 'Save' to add/edit a category it may take several seconds until YWD updates its internal databases. Please be patient and avoid pressing 'Save' more than once.