For various reasons, Wikia makes it extremely easy to add categories to articles. This in turn causes it to be very easy for users to create entirely new categories and rapidly populate the wiki with them. Awards have also encouraged users to add categories to articles in exchange for badges - needless to say these badges only take the existence of the added categories into account, rather than the quality of the categories.
This rule was written and imposed to prevent this 'category cruft' from swamping Bully Wiki.
Non-bureaucrat users may not create categories without approval. Editors wishing to propose the creation of a new category may propose the new category on Bully Wiki:Community Noticeboard, but they are still not to add it to any pages until the category is accepted as legitimate and worth keeping by the community.