In Quam Plures, a blog is the highest level of content separation. A "blog" doesn't have to be a blog-blog ... but it could be. Each blog can have it's own RSS feed, and can be completely separate from (or fully integrated with) all other blogs in your installation. You can have as many blogs as you want.
Each blog must have at least one category, and can have as many as you want, and each category can also have "sub-categories". Categories are how your content (items, posts, pages) are organized, meaning an item is in a category which in turn is in a blog. It is possible to move a category from one blog to another, which would move all the items in that category to the new blog.
Each blog also has a template. Your template determines what goes where and how it looks. For example one template might show the author's name for each item, another one might not.
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