Item Phases are a way of subcategorizing/grouping Items. They also summarise certain information where applicable, for instance, Time Allocated per Phase and Time Spent per Phase. You can choose to add Phases to your Items list on a Project Details Page:

To add a Phase, click the "+Add Phase" button at the bottom of the list:

You can then enter the Phase name and click the "Create" button to save the new Phase:

You can reorder your Phases by clicking just to the left of the tick-box nest to the Phase name. Doing so will pop up a box that allows you to click and drag to re-order the Phases.

You can also add Sub Phases underneath Phases. To add a Sub Phase, hover over the Phase you want to create it under. A plus symbol "+" will appear:

Click the plus symbol and select "Sub Phase" to add the Sub Phase: