To manage categories in Squarespace (Product, Blog), you can follow these.
Product Categories
#1. Hover on a Shop Page > Click the Gear icon
#2. Click Categories on the left, you will see all categories on the right
#3. Hover on each category > Click 3 dots icon > You will see some options: Edit, Delete, Add.
- add option is to add a subcategory.
- to change the order of categories, just hover on each category >> Drag it up or down.
Blog Categories
#1. Hover on a Blog Page > Click the Gear icon
#2. Click Advanced (left side) > Then click Manage Categories (right side)
#3. Then you will see all the categories
To edit a category > Click the square box icon > Click Edit or Delete
With Edit , you can rename Category