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A root category is where a site's category structure will start. Everything above the root category is ignored and only the subcategories of the root will be displayed on the site. We have this option so that multiple storefronts can specify different root categories for their site. Selecting a root just changes the appearance on the front end. The complete category tree can still be viewed in the back end through the administration console.
See the referenced KB article to learn how to set a root category.