The theory of social categorization assumes that the social behaviour of people can be explained as a result of cognitive differentiation of social objects into dichotomous categories (in-group, out-group). An argument can be put forth that social Categorization is a specific instance of functioning of a cognitive system that operates as multidimensional psychological space. Distances between representations of objects in the space influence the process of application of judgements to the given object and to the degree of involvement instigated by a state of an object and tendency lo produce specific behavioural acts toward the object. Typically, the relationship has a characteristic of an exponential function. There are conditions (social and psychological) that foster a discontinuity in a functioning of a cognitive system and therefore, lead to a dichotomous classification of social phenomena, while in some other conditions a continuity may prevail. Data that seem to support the above conjecture are described.