Allow users access to their own Files:
Manage > User Settings > Access to own Files. You can set to OFF, View Only, Upload Only, or View and Upload.
For the Files tab on a user’s account, you can allow users to see their own files, and/or upload files. When view is allowed, you can still hide individual files.
This does not allow the users to create new categories or edit files.
Your users can access this by selecting their name in the far right corner > My Account > Files Tab.
Categories: If you no longer need a Category, remove all the files from that Category and it will be deleted.