Tags vs. Categories

I am currently attending a social media class.  I am learning all kinds of things about Twitter, Facebook, Flickr and of course blogging!  A new question I have: What is the difference between a Category and a Tag?

Categories are large and general themes that you write about. Tags can be more specific. For example, if I have a craft blog and blog about Knitting, Knitting would be a category, but Hats might be a more specific tag.  Tags may be Google searchable, categories are only used within the blog to organize posts.