Shaji - Yes...in Omniscope data typing, Category fields mean columns of Text values where the unique value count is small enough to be useful in visualisations and checkbox filtering. A field like [Day of week] will only ever have 7 values, so this will automatically be typed Category, but all the surnames in the London telephone directory will always be typed just Text, since there are too many and there is no point splitting pies or bars by millions of surnames...

There is not really a hard limit and you can 'force' categorisation if you have a file that is analysing, say, 300 store locations. Just go to Data > Manage fields and switch the data typing to Category. There may be performance warnings, etc...so make sure the forced categorisation is really worth it.