I am importing an exported SQL file from exact the same database and same blog.
Have you added or deleted stuff to that blog in the meantime? Does the data already in the database conflict with data that is in the SQL file?
The reason you're getting the error in question is because your exported SQL file has the statements in it to create the database *from scratch*. It's a backup. When the table is already there, it has a problem with that. You're trying to restore a backup (designed for creating the whole thing) into an existing database (which thinks that it is the whole thing). That's not going to work properly.
You really shouldn't mess with SQL files if you don't understand databases. The main thing you're going to accomplish is to break your site. Badly.
I certainly expect wp_categories table to be there. What I don't understand is why WordPress can NOT simply update the table?
This has nothing to do with WordPress. You're doing straight SQL, bypassing WordPress altogether.