"Category error" is one of those terms that I use intuitively (AKA lazily), but never looked into.
The definition is ascribing a property to something whch cannot have that property, thus placing it in the wrong, inaccurate, or misleading category of things.
Example: "It's like comparing apples with oranges." (It's an odd expression, since they are both round fruit, etc, but we know what is meant by the analogy.)
Often category errors are simply cute ways of speaking or figures of speech, without intent to confuse, as in:
Example: "My car doesn't want to start." (attributing intentionality to a pile of metal)
Example: Socialist ideas marched through Europe.
Example: "My computer can't think fast today."
or humorous:
Ex: "My brain is trying to kill me" (Calvin, of Calvin and Hobbes)
or colorful and poetic:
Ex: :"..while my guitar gently weeps."
When a psychiatrist says "The id is at war with the superego" (Dr. Bliss would never speak that way), that entails a sort of category error by attributing "thingness" and capacity for action to abstrations (also entails the fallacy of "reification" - closely related - eg. attributing "thingness" to abstract concepts). Thus while the statement basically says nothing, it's a useful if awkward kind of shorthand for something that is meaningful. The philosopher Gilbert Ryle, in his very readable mega-classic The Concept of Mind, represents the latest word on the ways we think of mental things - (and slays Descartes in the process).
How can category errors be used to trick people? It just takes a little sleight-of-hand.
One often used by medical malpractice plaintiff's lawyers and all kinds of trial lawyers is to attempt to conflate two distinct categories: "accident" with "error." Thus: "Ladies and gents of the jury, it is clear that if Mr. Jones had bothered to built a stronger fence around his pool, the thunderstorm that knocked down the tree would not have crushed his fence, thus permitting the neighbor, poor old widow Mrs. Smith's only friend, her cute little white Shitzu (show photo), to drown in the pool, leaving her bereft and traumatized, requiring years of costly psychiatric help and daily taxi rides to the Pet Cemetery. Ladies and gentlemen, this was no weather accident - this was negligence pure and simple with a catastrophic result."
Here's another:
"2900 children died from firearms in 2004. Handguns must be made illegal." What category errors are involved here? First, they define "children" as age 0-19, thus including gang warfare and criminal actions in the numbers. Second, they include suicides, which accounts for 33% of that number, and accidents, which are 6%. Third, they do not mention how many of those deaths were via illegal firearms - eg. already banned). Fourth, they do not mention how many of those deaths were by handgun. Thus by confusing and mixing categories, an effort is made to maximally dramatize the effect.
A now-classic example is the famous "hockey stick" graph which is meant to demonstrate man's effect on climate. The hockey stick graph represents an insidious category error, because it uses tree-ring climate data for most of the graph, but the recent upswing is from entirely different data - surface temperature - so it is like counting bushels of oranges in this year's apple crop.
Editor: My apologies to The Barrister, but I did a bit of work on this one also, making it a bit too long.