Category : It is used if we want to add any method on a given class whose source is not known. This is basically used when we want to alter the behaviour of any Class.
For example : If we want to add a method on NSString to reverse a string we can go for categories.
Subclassing : If we want to modify state as well as behaviour of any class or override any methods to alter the behaviour of the parent class then we go for subclassing.
For example : We subclass UIView to alter its state and behaviour in our iOS code.