How many? Up to two per book.
How are they used? The categories you chose are listed at the bottom of your Amazon book page. In the past, Amazon allowed you to choose up to five of them, which is why some books have more than the allotted two. By choosing a category for your book, you are in fact choosing a browsing-path for readers, a path which consists of a hierarchy of sub-categories, indicating how your book can be searched and discovered. In the case of the paperback edition of my book, Apart From Love, I have just updated the categories as follows:Books > Literature & Fiction > Drama > United States
Books > Literature & Fiction > Women's Fiction > Contemporary Women