Information about categories is located in the data/categories.yml
file.
This file must exist.
Here is an example:
category1:
name: Category 1
slug: category1
category2:
name: Category 2
slug: category2
Each category must have a name and a slug. The category label should usually be the same of the slug, but it is not required. The object label is how the category is referenced by posts and the slug is how the category will appear in URLs.
It is possible for other information to be added to categories and to write themes that would use that information.