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Let's start with some definitions. An Article is some written information that you want to display on your site. It normally contains some text and can contain pictures and other types of content. For many sites, articles form the majority of the information presented in the website.
It is important to understand that, the content of the site (for example, Articles) is totally separate from the formatting of the site -- the way it looks on the page. So it is best to think of articles as pure content, independent of the way it might be presented. For example, the same Article might be shown with different fonts, colors, headings, and background, and might be shown in different locations on the page.
Sections and categories provide an optional method for organizing your articles. Here's how it works. A Section contains one or more categories, and each Category can have articles assigned to it. One Article can only be in one Category and Section.
For example, you might have a Section called "Pets", and categories called "Dogs" and "Cats". Articles about dogs would be assigned to the "Dogs" Category, ones about cats to the "Cats" Category. So an Article about dogs would be in the "Pets" Section and the "Dogs" Category. You cannot have one Article that is in both the "Cats" and "Dogs" categories. To work around this, you could either (1) create a new Category called "Cats and Dogs" or (2) create a second Article to put in the second Category.
There are two main reasons you might want to organize your Articles in sections and categories.
First, there are built-in Menu Item Types in the CMS that take advantage of this organization. These are the Section Blog, Section List, Category Blog, and Category List. These Menu Item Types (also called "layouts") make it very easy to show articles that belong to sections or categories. As new articles are created and assigned to sections and categories, they will be automatically placed on these pages according to the parameters you set for each page.
For example, say you have a Section Blog layout for the "Pets" section, and say you have it set to order articles starting with the most recent one first. When you add a new Article to the "Pets" Section, it will automatically show on the "Pets" blog page as the first Article. You don't have to do anything other than add the Article and assign it to the "Pets" Section.
If you will have a large number of articles on your site, a second reason to use sections and categories is to simply group the articles so you can find them. For example, in the Article Manager, you can filter articles based on Section or Category. So if you have 200 articles in your site, you can find an Article more easily if you know its Section or Category.
It is important to understand that, just because the CMS uses a 3-tier organization level for articles (Section → Category → Article), this has nothing to do with the structure of the menus on your site. For example, your site could have one menu level or six menu levels.
There is also a potential for confusion about categories. Sections are only used for articles. However, categories are also used for other components, including Banners, Contacts, News Feeds, and Weblinks. These categories are completely different from Article categories and are set up in different screens in the back end of the CMS. So when you see something about categories, it might refer to Article categories or it might refer to categories for these other components.