You must be logged into the frontend control of the website and have calendar priviledges to be able to add events to the calendar. You will know if you have access to adding events by going to the calendar of your website and seeing if each date in the month view has a + sign in it. If you do not, click here to find out how to get calendar access priviledges.
If you do have calendar admin priviledges, go to the bottom of the calendar and click on the calendars link.
Click the letter "D" to bring up the name of the calendar (the default calendar is named default, so thats why choosing the letter D brings it up).
You will now see your default calendar listed. On the very right hand side of this calendar listing, you will see 2 buttons: Edit & Delete
Click on the edit button.
You will see 5 tabs. Choose the 'categories' tab.
To REMOVE a category, just highlight the category you want to delete, and at the bottom of this page ( you may need to scroll down in this window to see the these buttons) just click on the delete button.
To ADD a category, type in the name of the category you want to add in the 'Title' field (right below the list of existing categories) and click the add button at the bottom of this page ( you may need to scroll down in this window to see the these buttons).
To change a category look or color, highlight the category you want to change and in the color section, enter in the values you want that category to be. Then click the update button at the bottom of this page.