Before categorizing defects, first we have to understand two major key points:
1. Priority which indicate the urgency of getting the bug fixed.
2. Severity which indicate the effect it has on the system in terms of its impact
Priority can be categorized into the following levels:
Critical : The defect affects critical functionality and must be fixed in the current build.
High: Must be fixed in any of the upcoming builds but should be included in the release.
Medium: May be fixed after the release or in the next release.
Low: May or may not be fixed at all.
Severity is denoted as:
Critical (S1) : Main functionality or major system component is completely broken and testing cannot continue.
Major (S2) : Major issue where a large piece of functionality is not working
Minor(S3) : Some part of functionality is not working but there is a workaround and qa services can proceed with testing.
Trivial (S4) : An issue that inflict some loss of functionality but it is acceptable have an easily reproducible workaround.
Now, based on the above details you can categorize defects into defect matrix.