To delete a category, select it in the tree, right click to bring up the popup menu, and select . If the category has no transactions, schedules, or budgets associated with it, and it is not set as the default category for new transactions with any payee, it will be deleted.
If the category has any of those items, a popup will be displayed allowing you to choose another category to which all those items can be reassigned before the category is deleted.
If you delete a category which is the parent of any other categories, a dialog will be displayed for you to choose whether to delete that category and all its sub-categories or just the parent category. If you choose to just delete the parent category, then all its sub-categories will be moved to its parent category.
Note that deleting some categories may prompt both for where to reassign its data and also whether or not to delete any sub-categories.