To disable a Category, complete the following steps:

1.Go to Site > Configurations > Application Categories
2. Click the Edit button for the category you wish to disable
3. Un-mark the checkbox for Enabled
4. Click the Save Category Button
5. Once a category has been disabled, it will be listed under a "Disabled" section:
Categories page showing where a Disabled category is listed
6. You can set the category back to Enabled if you need
7.  If the Enabled checkbox is grayed out, as in screenshot below, the Category cannot be disabled as it is a system default category.  Default system categories are those that have an "Application Impact" description on the All Categories page.  If you wish to prevent the Category from being used, consider renaming it "DO NOT USE" and mark it as not visible to Applicants and Reviewers.
A screenshot showing the Enable box grayed out.