The "Add New Taxonomy" and "Edit Taxonomy" screens consist of a large form with all the settings you need to create a taxonomy, or edit an existing taxonomy, respectively. The Add New screen can be reached in one of two ways:
- In the top toolbar, go to Create > Taxonomy
- Go to Creator > Taxonomies, then click “Add New”
The Edit screen can be reached by going to Creator > Taxonomies, and then clicking on the name of the taxonomy you wish to edit. Note that for convenience, taxonomies can also be created when adding a taxonomy field to a field group. Also note that this screen is not for adding or editing terms assigned to this taxonomy, in the same way that the Add/Edit Content Type screen is not for adding entries to that content type. This screen is only used for settings about the taxonomy. To see how to manage a taxonomy's terms, see Using Taxonomies.
Settings
Singular Name & Plural Name
Add a name for your taxonomy here, in both singular and plural forms. Because the taxonomy is a set of related terms, choose a name that describes the terms as a whole, and perhaps how they relate to a content type. "Categories", "Tags", and "Formats" are all built-in taxonomies. Example names for custom taxonomies:
- Color/Colors with terms like "Red", "White", and "Blue"
- Event Type/Event Types with terms like "Festival", "Concert", or "Party"
- Genre/Genres with terms like "Mystery", "Nonfiction", and "Sci-fi"
Available For
"Available for" specifies which content type or content types the taxonomy is assigned to. Clicking inside the box will cause a dropdown list of all available content types to be displayed. Typing in the box will automatically narrow the list based on the entered text. You can attach any taxonomy you create to one or more content types. 
By assigning it to a content type, the taxonomy will appear as a submenu item under the content type in the main dashboard menu. It will also appear on the screen to edit entries of that particular content type.
Archives
By checking this box, an archive page will be created for each term in this taxonomy. For example, by default, WordPress creates archive pages for every Category at example.com/category/sample-category. This page lists all posts assigned to that particular category. If you wish to turn on this functionality for this taxonomy, check this box. When you do, you will be able to customize the URL for these archive pages. 
Sidebar
To the right of the main taxonomy options, the following additional options appear:
Description
The description is only displayed within the WordPress admin areas. It is an optional field, but can be helpful if you have multiple taxonomies that use very similar names or even just for leaving a note for yourself, other developers, or even the client about the purpose of that taxonomy. 
System Name
The system name, also referred to as the slug, is the lowercase “URL friendly” version of the taxonomy. If left blank, it is generated automatically, and will contain only lowercase characters and underscores. You can choose an alternate system name if you like, but it cannot be modified again once the new taxonomy has been saved. 
DELETE/SAVE
Click the small red “Delete” link to delete the current taxonomy, or the large blue “Save” button to save or update the taxonomy. Note: there is no “trash” for deleted taxonomies. When you click delete, you will be asked if you are sure. Immediately after deleting, there will be a link to undo the deletion. After these two chances, however, the taxonomy will be deleted permanently.