Categories Widget
The Categories widget displays a list of the categories that you’ve assigned to published posts.
It helps site visitors quickly see what topics you write about.
Here’s what it looks like when it’s added to a sidebar:

Only categories that have been assigned to publish posts are displayed in the widget. Refer to the adding categories support page for more information on working with categories.
Settings
Once you add the widget to your sidebar in Appearance > Widgets, you’ll see that the widget settings look like this:

Title: Allows you to add your own custom title. For example, Posts by Categories.
Display as a dropdown: when this box is selected the months are displayed in a dropdown menu rather than as a list. Using “Display as dropdown” is ideal for reducing sidebar clutter and to save space.

Show post counts: when this box is selected the total number of posts publish for that particular category is displayed next to the link.

Show hierarchy: when this box is selected the subcategories are displayed under their parent if you have used parent and child categories.

Category order
If you want to display your categories in a specific order, you can build a custom menu then add your categories to your sidebar using the Custom menu widget instead.