Categories help you organize posts topic-wise in a way where your blog reader will know immediately what to expect from a given post. Every post should be assigned to one or two categories.
Adding a post to more than two categories isn’t a good idea. You can use tags instead.
Creating a new category.
- Go to WordPress Dashboard > Posts > Categories.
- Fill out the form on the left side. Not all fields are required. Only the “Name” field is obligatory.
- Click the "Add New Category" button.
Featured Image is displayed in the header background on the category archive page. You can see an example of this on the screenshot at the top of this article (background of the “Travel” header).