There’s a lot of confusion surrounding categories and tags in WordPress. They seem to serve similar functions; both are able to sort your posts into specific groups, and both have the same ability to display posts from the specific category or tag on its own page. But they are actually meant to serve different purposes.
Categories are used to group your posts into groups usually based on topic. For example, if you have a blog where you discuss various topics ranging from recipes to product reviews, you would have one category called “Recipes”, another called “Product Reviews”, etc.
So what the heck do you use tags for? Tags are most useful for breaking your posts into topics within that category and/or listing minor elements from the post. So if your blog had a “Recipe” category, you might include tags such as: Entrees, Pasta, Quick Meals. If you are posting something in the “Product Reviews” category, you could add tags such as the names of the brands used in the review.
Do I NEED to use both categories and tags?
Categorizing your posts into different categories is highly recommended. This is because posts with un-assigned categories are put into the “Uncategorized” category by default. If you don’t wish to categorize your posts, it is recommended to rename the “Uncategorized” section to something a little nicer such as “Miscellaneous”, “Other”, or “General Posts”.
Tags are not needed for your posts unless you wish to include them (I personally do not make much use of tags), but for certain types of blogs they can be highly useful. A beauty or fashion blog, for instance, can make a lot of use out of tags by using them to list different brands, which is something that visitors might search for if there is something specific they’re looking to see. A Food Blog that categorizes their posts by Appetizers, Entrees, Desserts, etc could make use of tags to list to specific food items like: “chicken dishes”, “soups”, “cakes”.