I made the mistake originally with this blog of giving categories to all the related items with each blog post. Now I have the massive job of converting the categories to tags and figuring out which categories I want to have set here.
Tags and categories are used for search engines to be able to find which webpages are the most relevant to the words being searched. The SE will take into consideration website names, post titles, text sizes, categories, tags, links, and other factors.
Your list of categories could be used as a sidebar or widget on your blog. You can use this as a way for onlookers to navigate your site and find your posts related to that topic.
Categories can be used for people who are already on your site. Tags are for people to find it.
Tags are all words related to your post. You can just go off on this and type a million tags – you will only clutter that post. If you are spamming though, the more tags the less weight the tags hold though, but if you are an honest blogger you shouldn’t have to worry about this.
You want to put as tags specific words or phrases that people may search for to find your post. Put yourself in the person’s keyboard who might want to find you. What would they google search?
You can have multiple categories for a post.
There is much more to categories vs tagging, but this is just a start.