When I first started working with Joomla I did not understand the proper use of the Sections Categories and Articles.
Here is a short description of how they work.
Articles are where the content is written for publishing in Joomla.
Categories in Joomla consolidate similar articles into groups. The example given in the Joomla documentation says categories would be a collection of articles about something like "Cats" and "Dogs".
Sections (Joomla 1.0-1.5)
Joomla sections are the top level for categories. The example given in the Joomla documentation is a website where it has a section called "Pets" and categories called "Dogs" and "Cats". Essentially the sections group together categories.