It's best to start off with a plan. By a plan, I mean have an idea about your writing theme and the topics that will support it. Organization is important especially when you get to the point of 100 or more posts.
In the Manage > Categories tab, click Add Category and fill in the information about your category. Continue to add your parent categories, going down the list. Hold off on entering sub-categories until all the main categories are entered.
- NOTE: You can add any new categories any time, but make a note of the fact that categories can be sorted in WordPress in two ways: by name (alphabetically) or by ID number. As you enter the categories, they are assigned an ID number. It is difficult to change this, so if you don't want your categories sorted alphabetically, enter them in the order you want to see them presented on the screen.
When you have the parent categories entered, enter your sub-categories. In the pull down menu for Parent Category, you can select the parent to the sub-category you are adding. When you view your categories in the Manage > Categories panel, you will see the categories listed like this:
Put Posts in Categories
From the Manage > Category panel, click on the tab for Posts. You should see the test posts you entered here. To the right are three links that say: View - Edit - Delete. Click on Edit to edit one of the posts. On the right side of the Edit Post screen you will now see your Categories. Choose one of them by clicking in the box next to it. Then scroll down the page and click SAVE. Repeat this for your other test posts, putting each one in a different category.
Your categories will usually show up on your sidebar. This will ease navigation for your readers.