This feature varies depending on the back end ERP system. For Small and Midsize industry ERPs like SAP Business One or MS Dynamics NAV, categories will be created and maintained only in Magento. APPSeCONNECT will sync categories and attributes to ERPs.
While for ERPs like SAP ECC/All In One which are large enterprise ERP, categories and attributes defined within the ERP system will be uploaded to be created in Magento.