Raw Materials are items that are used primarily to craft other items.
Food can be consumed to restore health. To eat food, make it the active item, then right-click.
Plants are Minecraft's representation of plant life. Some can be harvested for food (see Farming), some can be harvested then replanted (sugar cane) and some is decorative.
Colors that can be applied to wool to make colored wool blocks.
Tools are items that can be used to gather materials, or to perform completely new actions.
Weapons are are used to cause damage to monsters, critters and other players.
Armor can be worn to increase your resistance to damage from attacks, falling, drowning and fire. Protection is displayed via a separate health bar with up to 10 armor points.
Vehicles can be used to transport players, creatures and items.
Decorations are items that are primarily used to make your buildings and structures look awesome.