The latest version of Joomla has made the process of managing your articles even easier, with a much more streamlined logic behind the process of cataloging your articles.
Sections are no longer used in Joomla 1.6 onwards, instead Categories can be nested within one another to create a more efficient hierarchy of articles and categories.
To create a category click on Content button in the top menu, and follow the rollover from Category Manager to Add New Category.
Enter the Title and Alias in the following screen. It doesn't matter what you enter in these fileds, but it is a good idea to make them relevent to the content. For instance, If I call my category "Sports Cars", I can give it the alias "Sports Cars" as well.
A description can also be entered from this screen. This will be shown at the top of the page for that section. For instance, In our category "Sports Cars", you may want to have an introductory paragraph or image. Enter this information in the Description field.
Make sure to press the Save button (Situated towards the top right hand corner of the page).
Categories can be nested inside other Categories. To do this, Click on the drop down menu entitled Parent, and select the category that you wish to use as the parent category.