Categories can be useful in Category List and Product List views.

Store Categories
Store Categories are useful when you have multiple stores which needs to be categorised. You can create store categories by visiting Catalog -> Store Category page. See picture below which allows creating store category with inputing title, description and icon image.
Note : You need to keep your List View option as Store List view from settings page to show store categories.

Product Categories
You can create multiple categories for products too and you can assign them to any products you need. You can create product categories by visiting Catalog -> My Category page. See picture below which allows creating product category with inputing title, subtitle and icon image.
You can assign category to product in Edit/Add product page.