The Categories widget allows you to add a list of categories to one of the sidebars of your site.
- Go to your blog Dashboard
- Click on Appearance > Widgets in your Dashboard left sidebar
- Drag the” Categories” widget from the “Available Widgets” area onto one of your sidebar areas
- Configure the widget and click its “Save” button
The Categories widget has an option for displaying categories in a dropdown list menu (instead of displaying the list of all categories in the sidebar). Use this if you don’t want to use as much space.
Other options are to show the number of posts in each categories and whether or not to show as a hierarchy whereby sub-categories will be displayed indented beneath top level categories).