Can anybody suggest me how to do display ads in adwords as i want to target different categories of people.
Setup a campaign and choose Display Network as campaign type. The Display network allows you to target different categories of people, not the Search network. I'm guessing you know the difference between Search and Display? AdWords does not allow you to target people in the same way as Facebook (far more advanced in this way) but it will allow you to choose people who have visited certain types of sites (interests), age groups and gender. Pretty limited. Facebook will let you advertise to people who like certain things, or who have gone to certain schools. Far more detailed. But check out the Display Network settings in AdWords and you can at least target based on interest, age and gender.
To add on to MadAdwordsMan, do remember to use some interactive call to action image ads! Image ads will increase your CTR and generate more ROI for your campaign. And of course, think out of the box where you could target your crowd, eg, if you are doing interior design, you can try target display sites like property selling site/portal/forum. Cheers!