Need assistance with creating categories, and linking notes to categories

I would like to use categories to organize my notes. I can create category folders and collections. I have created both of these and placed them in varying locations. the challenge I am experiencing is hat I cannot get the categories to show up on the right sections of the screen when I view my notes (so I can drag and drop notes into the categories). At one point (as I was deleting all the test category entities I created to try to get them to appear) I think I eliminated the original category entity. I recreated one (although I'm not sure it's in its original position).
As I have work to do, I am using categories under the Composition section. I'd like to use the category functionality, but I can't.

At the top of the Categories

At the top of the Categories tab, please select a categories folder and all the categories under that folder will be shown. You can also do a categories search.