{{cat}} is a simple little template that is used to build other templates. It ensures your template doesn't get placed into the category that the template automatically populates.
For instance, if you use the template, {{what?}}, on a page, that page gets put into category:Articles with statements that need clarification. This template prevents template:what? (and template:what?/doc) from getting placed into that category.
This template, or at least the raw code of the template, should always be used in the code of any template that automatically categorises pages. There's never a reason that a template or a template documentation page should be in the category which the template creates.
Usage
To use, simply type
{{cat|<name of category>}}
so, for our {{what?}} example,
{{cat|Articles with statements that need clarification}}
That's it! Simple stuff — and fewer keystrokes than typing
<noinclude>[[category:template documentation|{{PAGENAME}}]]</noinclude>