change categories?

You can neither change the category of an existing item, nor you can create new categories. How do you intend to use categories? Just as grouping criteria, or are you using categories as data templates for new items?
For grouping criteria: use tags and group by tags. You can even nest tags by splitting name components with /
For data templates, there is no direct workaround, but you can add custom fields to every item, so every item can contain any kind of data. For a new item, choose the category whose set of fields most closely match your use case, then add missing fields as custom fields. The downside is you cannot sort and rearrange fields, but in general they can exist - that's better than no custom fields at all.

The CATEGORIES half-baked feature is worse than useless as implemented and if the user can't add, delete, modify the items in CATEGORIES. As it is, when I imported data most items (such as bank account, Credit Cards, others) were completely missed by whatever mechanizm assigns CATEGORIES **now. Are there any plans to fix **CATEGORIES so users and decide what goes in each **CATEGORIES **item? Please remove or demote **CATEGORIES ** from the site until you have a more robust version of it.

I am migrating from LastPass to 1password and it imported all my bank accounts/payment accounts/profiles/web accounts...into a generic private group (800 credentials) and now each one of them asks to manually create a new item in the appropriate category and MANUALLY copy paste each field one by one... This looks like a 2-year plan.

Shall I stick to LastPass or is there a better way to categorize it? The account was migrated as per 1password steps of exporting data from LastPass and then importing into 1 password

Surely, with all the regular updates, the 1Password infrastructure team could have built in the facility by now to permit a change in the categorisation of populated entries if, when first choosing and populating [and saving] the data, it subsequently is determined that the selection/choice of the original Category was inappropriate and a change is then needed. This seems pretty basic to me [I am not a programmer by any stretch of the imagination] so forgive my ignorance but judging from the plentiful threads on this issue, it seems a long standing problem and one that customers would clearly appreciate being rectified - myself included!

They’ll be a good reason for it I am certain [probably infrastructure based] but I can’t fathom out what that might be - a lot of people want and need the facility - hopefully they will consider it in the next build?

@Ben - I think you inadvertently hit the nail on the head with this statement:

"Categories exist not only for organization but also to define the template an item will follow."

The requests to change categories for end users comes down to providing better organization. However, since they are treated like templates, they can't be changed.

A "Template" implies you are locked in to certain constraints.

A "Category" implies organizational flexibility.

Example: I am a 1Password admin for my company, and we use 1Password for Teams. Multiple people have access to a same shared vault. User A creates a new entry using the top-left entry (Login). User B realizes the incorrect category was selected and it should have been "Server". Unless we have a staffed 1Password manager to delete / recreate the invalid entry, it renders the "Categories" section useless. And yes, almost 99% of the time, people just pick "Login".

I would like to propose renaming "Categories" to "Templates", which makes more sense for end users.
Bonus request: Rename "Tags" to "Categories", and allow only the vault owner to define those tags/categories for that vault to limit tag sprawl (and while we're at it, don't make tags/categories case sensitive).

I just spent 3 hours trolling through 300 entries individually, one at a time, cleaning up tags and deleting/recreating entries incorrectly set to the wrong "Category". And I have thousands to go, and they only grow by the hour. At a certain point, the hill becomes too tall to climb.