What is the difference between Contact Categories and Contact Groups?

Contacts can be assigned a single type, but they can belong to different categories.

When setting up a contact a contact type can be assigned to that contact.

Typically contact types are used to group together contacts that belong to the same group. For example, a contact type could be "Prospect" or "Customer".

Contacts can also be assigned to one or more contact categories. Contact categories are another way to group contacts together.