The use of the word “categories” is actually a bit of a misnomer for Shopify users.
Officially, Shopify products are always organized into what Shopify calls
collections, not categories. There’s also no way to create a hierarchy with collections — in other words there’s technically no such thing as a subcategory or subcollection in Shopify.
That said, it’s still possible — and fairly straightforward — to create a hierarchical relationship between collections by using Shopify’s built in navigation system.
For example, a store owner can “nest” links to specific collections under links to others to create a subcollection or subcategory. It’s also possible to filter a collection by tag and direct shoppers to what is essentially a subset of a larger group.
For example, a menu link to a “Jeans” collection could actually be a link to a more general “Bottoms” collection that has been filtered to show only products that have a “jeans” tag.
The lack of hierarchal organization for Shopify collections can be a bit confusing from a store owner’s perspective because all collections will appear within the same master list of collections in the Shopify admin.
Also keep in mind that many users have a tendency to think of collections as folders similar to the folders you have on your computer's hard drive. However, this is a bit inaccurate because a single product can belong to one or more — even hundreds — of collections, unlike folders, which typically only allow a file or object to be located in a single folder at any one time.
Note that collections can also be used to organize products in non-hierarchical ways. For example, many Shopify themes use collections to determine what items appear on the homepage or in another part of the shop, such as a more custom version of the
"related images" section for a given product.
Source:
https://outofthesandbox.com/blogs/s...-often-get-confused-and-what-they-really-mean