The number of categories you have on your WordPress blog should accurately reflect the content you write about. If you have a legitimate need for 50 categories, then by all means, 50 categories it is. If your content all falls under 5 categories, then that is all you should need.
Essentially, let your content dictate how many categories your blog has. Remember to look out for duplicate content, or pages with little to no content. It's possible that you have a single blog post that is tagged to two categories - and those categories have no other posts attributed to them. The category pages will then show short excerpts of the content (little to no content), and be essentially identical because the same post is tied to them (duplicate content).
