The idea behind categories is that they need to be a choice that the work item submitter can make.   If the work item submitter understands the current team structure, then they logically could just select the team directly (and in this case, you category names would just be the same as your team names).   For development submitted work items, that is often the case, but for end-user submitted work items, they will often have no idea what teams there are, or what exactly each team is responsible for.   In that case, the category mechanism lets you define a set of categories that do make sense to the end-user submitter, while still allowing automatic assignment to the appropriate team.   In addition, the category mechanism sometimes can allow you to restructure your teams without have to update all of the work item assignments, if you can just reassign one of the existing categories to a new team.