Categories are used to group entries (posts) that cover the same subject. Entries can be assigned to multiple categories. Categories are organized hierarchal. See example below.

Example:
  General :1
 muziek :2
  --Announcements :3
  --Events :4
  ----Misc :5
  Technology :6


To setup categories in v.804
  * Click Admin Panel 
  * Click Entries
  * Click manage categories