Hi Himanshu,
Data categories are used in Salesforce Knowledge, etc to help classify and find articles, questions, or ideas. You can use data categories to control access to a particular set of articles, questions or ideas.
Here is some best practices for Data Categories :
1. To quickly manage data categories, use keyboard shortcuts.
2. After creating or updating categories, set up category group visibility rules.
3. Save your changes frequently. The more actions you perform before clicking Save, the longer it takes to save.
Thanks