Categories not displayed in sidebar

I’ve entered 3 categories under my dashboard’s Posts tab, but can’t figure out how to make them display on left sidebar under Categrories. Any suggestion would be appreciated. In the Theme’s Category widget, when I entered one of my category names (Backpacks) it replaces the name Category in the sidebar with the category name Backpacks. Then the only category listed in the drop-down is Uncategorized. I have since removed the Backpack category name from the Widget, but left the 3 checkboxes checked. Any suggestions as to what I’m doing wrong would be appreciated. My site is at: http://caminosecrets.com