Starting about two years ago I began to come to the exact same conclusion you have regarding your definition of categories and tags. I’ve come to believe that in a well-organized blog a reader should be able to scan a list of less than 7-9 categories to quickly see what the blog is about, and then use the tags to find articles that relate to articles has already found of interest, most likely by coming from a link on another blog or from a search engine.

I recently re-organized my blog using this concept and I’m very happy with the results. I find to maintain it I constantly have to fight the urge to add another category, but fighting that urge is exactly the right thing to do; I use a tag instead.

As for @Thord’s comments to the contrary, Thord you are basically just using categories to categorize along a different dimension which is appropriate just not IMO as useful. I just visited your blog and couldn’t quickly find any use of your Texts/Shorts categorization, only your tag cloud which I found to be a bit overwhelming. I was able to get a feel for the focus of your blog given your personal statement and the items besides the tag cloud in your right sidebar so that’s good, but I would really have preferred a handful of top level categories to help me better grasp what you cover on your site. But that just my opinion; take it for what it’s worth.

First there’s my meaty ideas, reports, analysis of whatever. I call these Texts, and they are tagged to define what they are about, but belong to the category Texts.

Second, there’s my short observations of discussions online, weird stuff, interesting stories, or whatnot. I call these Shorts, because they are short, a few lines at most, and basically based on the link to the story. I tag these as well, and have them belonging to the Shorts category.

Now, a reader might not be interested in my quicklinking Shorts posts, since they don’t really say much more, they’re basically a link. Giving this reader the opportunity to just view longer posts (the Texts category) will increase his experience. Likewise, should someone stumble into a post in the Shorts category, since it is so short, I probably don’t want to display it in the same way I display long posts, therefor serving it differently on the basis of it belonging to the Shorts category.

If you look at categories like I do in this posts, it is not so much about labels as it is about increasing usability for the visitor. While I think most blogs probably need 2 or 3 categories, having those 2 or 3 will make them easier to read and use, and that makes it all worthwhile.

Blogs have no inherent organisational structure, besides the date, so each label whether it be tag or category simple points to a group of posts that share it. You can choose to use categories as site divisions and tags as sub-divisions, or have multiple hierarchies of categories, plus tags but they are still simply labels.