To add a category you click New category
in the page explorer. If you wish to create subcategories upon subcategories, the same principal holds true. Click on the category then click New category
again, and a sub category will be created.
You can then easily place your pages into the categories. This can be done by drag-n-drop or by defining the category when editing the page. Please note, if you change the category the URL address will change and you may want to do redirections.