categories are short list of mnemonics.
but:
- longer than a screenful is pain (you even started making the font smaller :] )
- too generic & impersonal

Not matching everybody, no support for localization, need to be maintained.

Tags are added on demand, allow localized strings like batizado, בר מצווה, днюха,
they'd have meaning for the family.
If you're running analytics:
current categories don't seem to be coherent features, i.e. holiday vs. birthday would not give useful insight on anything. in feature terms, you'd have to process categories into more coherent and higher level features anyways.
like with Tags,
you can match localized tags to a list of features, e.g.
4th July -> holiday, national-holiday
birthday -> holiday,family
bar mitzva -> holiday,family, tradition, religion
this better describes context of Tags.
categories still need that semi/fully automated processing, but you're curating them -> scale issue.

also, say Twitter hashtags are often localized, so you could allow tweeting a post with tags as hashtags.