Final answer:
The preferred level of categorization where people commonly use the same type of category is called Basic Level. It is not too specific or too general, making it functionally significant for daily use. This is observed in everyday language as well as in the scientific taxonomic classification system.
Step-by-step explanation:
The preferred level of categorization for when people tend to rely on the same type of category as each other in most situations is called the Basic Level. This concept stems from our cognitive architecture and how we naturally group and label things in the world around us. The Basic Level of categorization is considered optimal because it is neither too specific nor too general, making it the level at which people can most easily and quickly identify and interact with objects. For instance, a chair is a basic level term that is more naturally and commonly used than the superordinate category of furniture or the subordinate category of rocking chair.
The taxonomic classification system, which categorizes living organisms, also uses a hierarchical model at each sublevel to group similar organisms. This hierarchical classification begins from the broadest category, like the Domain, and narrows down to more specific groups. Nonetheless, the Basic Level remains the most functionally significant for daily use when categorizing various objects or beings. Therefore, the categories become broader as you move up the hierarchy and more specific as you move down, consistent with the principles of Basic Level categorization.