To manage the Report Categories for your folio instance, click on the admin gearwheel in the top right of the screen, then on the Admin page select Report Category:
You will then be shown a list of all the Report Categories in your instance. To add a new category click on +New:
Give the category a title, then click on Create, or Create and New if you have more categories that need to be added:
To see all of the retired categories go to the screen Report Category screen, then click the button that say Show Retired: