Creating Categories
You can create Categories to add your products to by going to: Store Catalog > Categories.

Categories are used to compartmentalize your products and give them organization. If you are using an integrated wholesaler, your site will already have a category hierarchy. You can add as many categories to this hierarchy as you like.
There are two different types of categories:
Static Categories: will only display the products the store admin has assigned to it.
Dynamic Categories: will allow you to select criteria for the products that you’d like to appear in that category.
Supporting Documentation
For a more detailed description of the functionality of the features found in this section of the admin as well as the definitions for the terminology used, please visit the following link(s):