A video, specifically on YouTube are movies made by different channels throughout the website. The most viewed video of all time is "Charlie bit my finger". The video has more than 800M views, more than twice as much views than how many people live in the United States.
The first kind of videos were all free to be made, without any risks of copyright strikes, and more. Their was only a few things YouTube prohibited, which were false thumbnails, false tags, false titles, nudity, and other inappropriate sources.
As time went on, YouTube has become a bit more business friendly, and YouTube restricted the right to put some certain music on your videos.
Tumbnails were an important source of videos ever since YouTube became more professional. Every YouTuber, especially the popular ones, such as PewDiePie or Markiplier use professional thumbnails on their videos. Some channels do not use custom thumbnails, following for the reasons that they are lazy, or if they don't know how to. However, YouTubers who don't use thumbnails do not get as popular as professional YouTubers.
Tags are supposed to be linked to a video that it is associated with. It is against the rules to use false tags.
Categories are things that describe your video of what it is associated with. An example of a category can be Music, Gaming, or People & Blogs. It is not against the rules to use false categories, as it is a common mistake.