Categories can be used on Expenses & Subscriptions. They help separate the data so you can see how much your expenses are for going out to eat ETC...
The first step to update a category is to go to the Categories on the Dashboard:
Now click on a category
You should see an Actions box with a button inside that says Delete Category click it.
Once you click the Delete Category you will be presented with a confirm box.
The category should be gone now.