A Category is Atom's term for a preset folder. Every preset Atom comes with (along with any preset you make or load in yourself) is loaded into a specific category, houses a bunch of presets.

Using categories is useful because it lets us organize presets. If we, for example, want to find all of the sounds our friend just emailed us, we can create a new category for our friend's presets. In doing so we can easily locate that category inside of atom and cycle through his presets specifically, without them getting lost alongside all of our other presets we already have in there. 

Atom ships with 5 main categories (Bass, Leads, Plucks, Pads, and Chords) and one "User," category, which is where any new presets you create and save will be loaded into. 

You can also create new categories by clicking the "Add New Category," button on the bottom left of the preset menu: