A categorical variable is like sorting things based on their type. Imagine you have a bunch of different fruits like apples, oranges, and bananas. You can sort them into different categories based on their type of fruit. So all the apples go in one group, all the oranges go in another group, and all the bananas go in a different group. That's kind of like what a categorical variable is. It's a way of sorting things into different groups based on their category or type. The categories can be things like colors, shapes, sizes, or any other characteristic that helps you group things together.