How to create categories in Drupal 7

Using Taxonomy an Vocabulary allows you create the categories for your Drupal Blog. Let me make it easy by this

1 : Setup Vocabulary in Taxonomy

The first thing you need to create Taxonomy unser Structure link

And now you need to add Vocabulary and Term

You can readmore at "Create Content Type and Term in Drupal"

2 : Add Field in Content Type

how to create categories in drupal 7

Select manage fields

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Create new field and enter name for Contrent Type.

Make Field Type "Term Reference" and choose which taxonomy applies.

On the next screen choose Save field settings

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and next choose Save settings

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3 : Create new post and now you can set category.

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Good luck,