Categorizing and Tagging your Content

In WordPress you can organize your posts using categories and tags.
Categories are used to organize broad topic areas where as the tags are used to describe your post in more detail.

Example post would for “Grid Alternatives Chosen by California Solar Initiative”
could be Categorized and tagged as:
Category: Environment
Tags: Solar Energy, California, Alternative Energy

Make Categories for Your Posts

To create a category, click the +Add New Category link in the Categories section below the post you’re writing. You can select multiple categories for the same posts. To manage your categories, go to Manage > Categories.

Additionally, through categories, you can manipulate your posts in advanced ways, such as excluding certain categories from your home page, or specifying where certain categories should appear. This is a common technique for magazine-style layouts, where you have different sections on the home page and you want posts from those categories to always appear in those sections.

Add Tags to Your Posts

Tags are like micro-categories or index keywords for your posts. Your site should probably only have 7-12 categories, but you can have hundreds of tags. Clicking a tag name below your post will show all posts with the same tag, helping readers find similar content (most readers arrive at your site through searches for a specific topic). You add tags to your posts by typing the tag names in the Tags section below the post. You can also manage your tags by going to Manage > Tags.

Source: http://codex.wordpress.org/WordPress_Quick_Start_Guide

Adding and deleting categories

The Tag Cloud widget – your obsessions made text