Memory requirements in regards to number of categories

The number of categories that you can have in a Joomla site is limited and proportional to the PHP memory limit per PHP script execution, that your server has.

This is due to the memory used by permission checking in order to generate the category tree in pages like:

- Joomla Article Form
- FLEXIcontent Item Form

(NOTE: permission checking takes up no memory if you are logged as Super Admin ...)

The result is that you get a memory exhausted error (or a blank page if error reporting is disabled)

The typical/default limit in many servers is 40MBs, if you enable Joomla Debug mode you will see these totals (depends on the site configuration ... and plugins/extensions that you installed):
- Joomla Article form using about 29 MBs
- and FLEXIcontent using about 40 MBs,

Here are some rough estimate of the categories possible to have when the following memory limits apply:

-- Memory Limit 40 MBs:
FC item form 400 categories,
Joomla article form 800 categories

-- 80 MBs:
FC item form 2850 categories,
Joomla article form 3250 categories

-- 128 MBs:
FC item form 3100 categories,
Joomla article form 3500 categories

so with memory limit of 128MBs you will have
FLEXIcontent code taking about 13MBs and permission checking taking about 102 MBs and other Joomla stuff about 13MBs

there is no way around this, other than increasing PHP memory limit imposed by your server configuration
-- a good value would be 64MBs or 96MBs

this can be done with adding to .htaccess:
php_value memory_limit 64M

If the above gives you an "internal server error" then remove it from .htaccess file and ask you web hosting support to make the increase