I'm finding lots of stuff on how to set up custom taxonomies but I'm left wondering when and why I would actually want to use one. Again, there are "examples" of custom taxonomies. But I guess the question I have is this: why not just use a new top-level category and build your taxonomy below that? In what kinds of situations does this not work or is it not the best choice?
The only specific answer I've found to this question claims that one might need more than two levels. But I think I've experimented and been able to develop at least four levels of category hierarchy.