To create Categories in Magento 2 firstly, in the left navigation, head to Products >Categories
You will see a grey button called "Add Root Category" - If there are no categories present, you need to create a root category. This will then house all of the categories that you want to appear on your website.
Next, click the root category and then click "Add Category". This will Add the first category to appear in your Navigation.
GENERAL INFORMATION TAB
Here you need to complete the Name of the Category, Set the category to Active, Create the url key (e.g milled-lead), You can add a category decription, Image if required, Page title and Meta information. Make sure to set "Included in Navigation" to Yes if you want this category to appear on the site menu.
DISPLAY SETTINGS TAB
Display Mode: If the category has got no subcategories, then you need to set the display mode to "Products Only". If there are more categories underneath this, then you can choose to either have Static Block Only (which can be used to display a subcategory listing page) or Static Block and Products, to have a combination of both.
Is Anchor: If a category is set to be an Anchor then it will inherit the products from all of the categories beneath it so you can be at the very top level category and see all products that fall under there and use filters to sort through them.
Custom design: Can be used to set a custom design for this page (if you have one), you can also set the date range that you would like the custom design to be active. E.g you may have a christmas theme over christmas on certain category pages.
Category Products: This is where you will add the products that you want to appear in this category. There is a small drop down that may be set to "yes", this means it is displaying only products that are assigned to that category. If you change this drop down to "ANY" then you will get the complete list of products on the site and you will be able to tick the ones that you want to add.
Position: The numbers in this field represent the order that the products will be displayed with the lower numbers being highest up on the page. Products left with a blank position will default to 0 and therefore appear at the top.
Once you have added all relevant products, click Save Category in the top right.