Multi-layered site content

I’m involved in the development of a site for a government project, the content of which will, in the main, cascade down in succeeding layers of detail about each topic. So under each topic there will be sub-topics and under each sub-topic, sub-sub-topics and so on for four layers at which point there will be leaf nodes in the form of articles.

Given this structure, it seemed to me that the best way of achieving what is required would be with a series of nested category lists. So my first question is whether that’s the correct starting point?

Each post on the category list would, I thought, point via a hyperlink to the next category list down.

If this technique makes sense the first list would be a list of items in the main category. The next list a list of items in a sub-category of the next higher category and so on. So my second question is as to whether WP categories are hierarchical in this sense? Can I create a category list for, say, Education/CommitteeMinutes and another for Transport/CommitteeMinutes or will the categories have to be unique, like EducationCommitteeMinutes and TransportCommitteeMinutes in order to get a list easily.

Or is there an better way altogether of doing it? For example would a custom taxonomy be a better choice?

My experience with WP categories so far has been entirely with top-level categories: and I haven’t yet had a need to use custom taxonomies. So any pointers, suggestions and advice would be very gratefully received.

Thanks in advance

PAE