I'm planning a site that will have approximately 10,000 categories in the installation.Does ExpressionEngine allow this? Is there a maximum number of categories allowed?

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There is no maximum number of categories in EE. However, if you have 10k categories in a group, the Publish Form will get quite unwieldy, listing out all of the categories in a list.

You might want to look at add-ons like Categories Field to improve on the default interface, or perhaps use Relationships rather than Categories.

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