To create a category in WordPress: Log into your WordPress Install; and click categories, right from the main screen. “then,” once you’re taken to the categories area you will see a place to enter the category title, slug, and description.
It should be noted here that You can do sub categories of categories as well.
If you are interested in having a certain Look and feel to your URL’s you might want to enter the slug manually, as it would be the equivalent to you putting a site section in its own directory. Otherwise; a slug will be generated based upon whatever you name your category.
Once you’ve got it the way you want it just click the “Add New Category” button. That’s it. “You are good to go.”