Categories are a site-wide way to organize your courses. You can also create subcategories. The categories or subcategories become an online course catalog. Organize them in the same intuitive way that you would organize a printed course catalog.
Every Moodle course must be assigned to at least one-course category. Even if you choose to hide the display of categories, each course must still belong to a category; that's how the Moodle platform is organized. For sites with one or a few courses, we often hide and ignore the categories and display just the courses. When we need to show our users an organized catalog, we display the categories and subcategories.