What does it mean that intermediate levels are for navigation?

Middle layers of hierarchy help you find things without getting lost in detail.

Example: Your personal knowledge system has 300 notes. Without intermediate levels, you face 300 items in one list — impossible to scan. With three top-level domains and no middle, you pick a domain and still face 100 items. Add an intermediate layer — 8 to 12 categories per domain — and every navigation step reduces your options to a manageable set. You never see 300 items. You never see 100. You see 10, then 10, then the note you need.

Try this: Open a knowledge base, project folder, or bookmarks collection you actually use. Identify the top level (the broadest categories) and the leaf level (the individual items). Now look at the middle: are there intermediate levels that help you navigate from broad to specific? If the middle is missing — if you jump from 'Projects' directly to hundreds of files — design one intermediate layer. Create 5 to 10 subcategories based on how you actually look for things, not how things are formally classified.