Categories and tags in WordPress is used to bring structure to the website and improves SEO ratings when done well. They can be used to group contents and tags are used to highlight the details. Categories have a sense of hierarchy, they can be parents or children of each other. Whereas tags don’t follow such rules, they can be added randomly to each post or article. This allows search engines to understand a website better and classify the site accordingly, and thus improves the SEO rating if the site is structured neatly.