If you decided to categorize your wardrobe, you could sort it by type (pants or shirts), or by color. To categorize is to put something into a category.
When you think of categorizing things, imagine taking a pile of marbles and putting them into little boxes by color. You are sorting things by how they are alike. Scientists categorize animals and plants by their properties. Doctors categorize illnesses by whether they are caused by viruses or bacteria. In movies, high school students are often categorized as jocks, popular kids, troublemakers, and geeks.