Categories are important to have a structured Digital Asset Management system. That's why it is important to set them right. You can also set permissions based on the categories where admins allow some user groups to take several actions. For example, only one user group can edit the assets while other user groups can only view them.
We suggest having parent categories first. It means that you need to decide on the top category and add the child categories to the parent category. Let's assume that you have a parent category called "Logos". Later on, you can add child categories below it just as "black & white", "primary", "colorful", and "socials".