Adding vocabulary term is easy.

Go to Administration>Content Management>Categories>List

Go down the vocabulary list and click the 'add terms' link.

Parents

This is only visible if your vocabulary has a single or multiple hierarchy.

You can select one or more parents for your term. If you want the term to be on the same level as all the other terms choose 'root'.

Term name

Give the term a title

Description

If you want to, give the term a description.

Synonym

This can be left blank

Notes

Always make sensible names for your terms as the term names and the parent child relatioships often show in other places around your site such as crumbtrails.