Q: is there a limit to the number of different tags (categories) you can create in Mavericks

Yes - so it seems

no you are not, you can add new tags by option clicking (right clicking) on the folder you want to tag, and clicking on tags... you can give tags any name you wish.

Docjr08 hi,

You can add/create new text tags but I believe you are still limited to the same basic seven (7) 'colours'. If I have this wrong please help and let me know how to expand the range :-)

Since you are talking about the colours then yes you are limited there, I'm sure there is a bundle that controls what those colors are in the \System\Library\CoreServices folder but I recommend extreme, white gloves, triple-check, precaution if you edit files in that folder.  Even more so when you don't have a guide as it can crash your system and make it almost unrecoverable unless you re-install the OS or you are a Single User Mode expert.  I am fine with the colours and you can later assign the blank tags to be one of the other colours.

It seems you are limited to the 7 colors, but you can create as many as you want with name only and no color