Categories can have child categories. For example:
You can create a parent/child relationship with your categories in several places.
You can select a parent category in the Categories main screen:
Go to > Catalog > Categories tab.
In the Categories tab, click Show/Hide columns and make sure that Parent Category is
checked.
Double-click on a category and enter the name of a category that you want to be the parent. You can also click on the icon to view a list of categories.