What's the difference between a subcategory and a parent category?

Consider the following category structure:

You'll see here that Ladies Clothing is the parent category of Dresses and Dresses is the parent category of Party Dresses.

There is one thing that makes a category a subcategory, and that's if you have assigned it a 'parent' category. You can read how to make a subcategory by clicking here.

In the above example Party Dresses is a subcategory because it has a parent category Dresses but Dresses is also a subcategory because it has a parent category of Ladies Clothing. A product can be both a parent and subcategory at the same time.