Categories are meant for broad grouping of your posts. Think of these as general topics or the table of contents for your site. Categories are there to help identify what your blog is really about. It is to assist readers finding the right type of content on your site. Categories are hierarchical, so you can sub-categories.
Tags are meant to describe specific details of your posts. Think of these as your site’s index words. They are the micro-data that you can use to micro-categorize your content. Tags are not hierarchical.
Text taken from http://www.wpbeginner.com/beginners-guide/categories-vs-tags-seo-best-practices-which-one-is-better/
As general thumb rule use lowercase for the values. Don’t mind about CamelCase underscore etc.