Tickled Pink - Category Index Setup
Create a Page under Pages>Add New.
Name the page whatever you’d like.
On the right side of the screen under Template select “Category Index” from the drop down.
Publish your page.
Navigate to Appearance>Widgets>Category Index and add a Featured Posts widget for each category you want to appear on the Category Index page.
Further breakdown of how each of these sections is set up:
WITH VERTICAL IMAGES
WITH SQUARE IMAGES