You can create categories and sub categories by going to Product > Categories as shown below:
Every product should have a main category and a sub category. For example, the main category can be Water and Beaches, and a sub category can be Boating and Sailing. The sub category is what will be shown in the product cards and listings
Additionally, when a user clicks on the sub category link in the product card, it will take them to the listing page with all the product in that particular sub category.