Each Defined Type has an option that allows you to categorize its Defined Values. For instance, if you're using a person attribute of type Categorized Defined Value then this lets you find and select a Defined Value based on its category, without having to go through the full list of all available Defined Values. The categories are maintained within the Defined Type itself if Enable Categorized Values is enabled, as pictured below. Each category can have child categories if needed. Keep in mind that when a Defined Value doesn't have a category, it will always be available. If a Defined Value has a category in cases where there are child categories beneath it, it will appear in the list when looking at the child categories.