How do I add categories in Atahualpa 3.4.9?

Alright. I am novice in this business. Please, help me. I'm about to slam my head against my desk with this.

How do in the world do I add categories to my website?

This is what I am doing when I go to my Dashboard:

Categories-->ADD New Category

Name:
Test

Slug:
Blank

Parent:
Blank

Description:
Test

I click on "Add New Category"


Then it adds the category on the right, and it shows it along with the category that comes with the template, but it does not show it on my website. What am I doing wrong?

By the way I'm running Atahualpa 3.4.9.


Help...help...help...