How do I add a category in Articles?

When trying to add a new article, as admin or as a regular member, it says to "select category" at the bottom, but there is no drop down list when I click on it, my only option is "select category". So do I need to set up categories somehow from admin? I looked around in admin control panel and cant find anything relating to Articles. Thanks

You have to look under admin - tools - admin articles  There you can setup category.

ah there it is! thanks alot killerhaai