WordPress comes with two built-in taxonomies for sorting and organizing posts: tags and categories.
The way WordPress is designed, “categories” is for larger, more broad topics while “tags” are more narrowly focused. For example, if you are operating a movie review blog, you might have categories such as “Horror” and “Sci-Fi,” but you might want to add the tag “Bladerunner” on a post in the “Sci-Fi” category that discusses that movie.
In WordPress, you’ll be prompted to select a category for every single post that you create (if you don’t select one, then the category “Uncategorized” is chosen). Tags, however, are optional. Furthermore, you can only choose from an existing list of categories when writing a post, but you can add an unlimited number of tags.
Tags are very useful because they provide very focused, specific information to help users quickly find relevant information on your website. Visitors can click on a tag displayed underneath an individual post to find other instances of that same tag, or you can set up a widget to display tags in various ways, including word clouds, tables, and a list of your most popular tags.
Note: WordPress’s default themes display tags underneath each individual post, but not all themes do. You can also modify how many tags are displayed by clicking on Screen Options.
Categories are organized in hierarchies, but tags are not. The only rule for tags is that each one must be given a unique name.
The primary function of tags is to give readers additional options for finding specific content on your site. For example, if you’ve written several posts about the Bladerunner movies and used the tag “Bladerunner” on each one, clicking the “Bladerunner” tag will display all of your posts together that you’ve written about the Bladerunner movies.