View difference between Paste ID: 5KjhYFCH and wGrQ6sP5

 <?php
-//# first of all, you need to get the category array,
+
-//   and I did it, putting the line bellow inside the loop
+$catid = get_query_var('cat');
-$category = get_the_category(get_the_ID());
+$cat = get_category( $catid );
 
-// once you have the category array, the rest of the code will work wherever you want on the page
+//#check if this is top-level cat//
 if( !$cat->parent ) : //there is no parent cat, therefore this is the top cat//
 
-$catid=$category[0]->category_parent;
+
-if($catid==0){
+
-  $catid=$category[0]->cat_ID;
+
 foreach ($categories as $category) {
     //# check if it is a real parent category with subcategories
     if ($category->parent == $catid):
         echo
 		'
 		<div class="cat-item">
 		<div class="image">'.get_cat_icon("echo=false&cat=".$category->cat_ID).'</div>
-    if ($category->parent ==$catid):
+
 		<a href="'.get_category_link($category->term_id ).'">'.$category->cat_name.'</a>
 		</div></div>
 		'
 
 		;
         //# here we go, getting the subcategories
         $subcategories=  get_categories('child_of='.intval($category->cat_ID));
         foreach ($subcategories as $subcategory) {
             echo '<span class="subcategory" style="padding-left:12px">';
             echo '<a href="">'.$subcategory->cat_name.'</a></span>';
         }
 
     else : //#not the top cat//
 
 //insert the (normal) loop to output the category posts if the cat is not top level//
 
     endif;
 }
 
 ?>