If you want to define a new category, use DotNetNuke context menu and click "New Category". If you want to edit an existing one, spot the category in Category List and then click the item.
Both adding a new category and editing an existing one, is handled within the same interface.
Just enter the Category Name and the Category Order. Category Name can be anything, and the order should be a positive integer number. This order determines the order of appearance of the category in all lists and combo boxes.
Add / Edit Category
You are free to delete a Category with Nuggets or Funnel associations. You don't receive any errors for broken associations. The behaviour of your funnel may become different. So you may consider deleting an associated Category with "special care".