Item Category : An item category is used to define if an item is suitable for billing or pricing. It defines the additional info to make a sales / purchase document .
It helps to identify the particular item via using category.
For understand it :
Every organization / business firm merchandising around to any product. i.e. website/software for an IT company, tool parts for a car manufacturer company or fiber, fabric or dyes for any textile industry.
And these product can be divided in categories also. These categories called item category.
For ex :
If a Textile industry produce a product like 'Shirt'.
A shirt can be, categorized into multiple category according fashion style  :
  -- Casual, Formal etc.
Then it can be added in Item Category.

Click on Commerce > Item Category Menu :
You will get page :


You can 'Add Category' using add button. It can also be edit & delete.



Now you can feed the proper data & click to add to Save info:

1. Name : Category name, can be any.
2. Display Sequence : It is used for displaying sequence of category at E-Commerce web.
3. Alternate Text : Mention alternate text.
4. Is Website Display : Please tick this option, for display this category on E-Commerce web.
5. Description : Description about category.
6. Custom Link : Mention custom link for this category.
7. Meta Link : Mention meta link for this category.
8. Meta Keyword : Mention meta keyword for this category.
9. Meta Description : Mention meta description for this category.
10. Parent Category : Mention parent category of existing category, if necessary to distinguish this category using parent category.

You will get the record, i.e.  :

After successfully addition of Item Category, Now you have to further move to 'Add New Item' .