Hi there, to make a sub-category, you just need to select an existing category from the “Parent” drop-down menu on the Categories page:
http://en.support.wordpress.com/posts/categories/#adding-categories-via-the-dashboard
You can see the Parent category dropdown menu in this screenshot:
http://en.support.files.wordpress.com/2010/10/add_new_category.png?w=420&h=471
You can add a post to a sub-category in the same way you add it to a category – you’ll just check it off when editing the post.
Just be mindful when creating your sub-categories that you already have some categories with those names.