Navigate to Components --> WMT Flash Gallery 1 --> Galleries

On first screen you can see current categories in your gallery. Here you can publish/unpublish categories, change their order, edit individual category and add new category.
To add new category click on the "New Gallery" button, enter category name, select ordering and publish option.

Navigate to Components --> WMT Flash Gallery 1 --> Images

On first screen you can see current categories. Click on category to see images that are assigned to that category.
To upload images, select category that you want, click on "Upload Images".

Front-end: 

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