Knowing the genre you're writing is important when you're crafting your novel. Genre is more than "a term for any category of literature or other forms of art or entertainment..." Genre is your novel's home.
Once you can accurately identify the genre you're writing in, all sorts of doorways and opportunities open up... and others close. A women's fiction novel, for instance, is not likely to include flesh-eating space aliens or a guild of ninjas. But a sci-fi novel would definitely have flesh-eating space aliens... and maybe even that ninja guild, too, if they are from the planet Zarkon on the edge of Galaxy 5. Giving yourself parameters to work within helps you better deduce which of the zillion options for your story are the most compatible and which are the most likely to make sense to your readers.
A lot of writers get cagey when asked to define the genre of their novel. It's like they don't want to commit... or they think that they can reach a wider audience if they use more than one genre in their query letter or manuscript description.
This is a big no-no, though. Agents and publishers will put aside a novel that claims to cater to more than one audience because it seems to signal a lack of vision. A targeted audience and a well-defined genre are a must for query letters. If your book is as amazing as you know it is, it will shine in chosen genre and then from there other types of readers will likely pick it up.
There are SOOOOooo many genres and sub-genres to choose from, too. There's no need to feel limited by having to choose one and run with it. So as you're writing, consider your characters, consider how and where your story fits in the marketplace (HINT: this is important for self-publishers as well).
So what genre are you writing in today?
Here are a few suggestions! Can you think of more? Action and Adventure, Chick Lit, Children’s, Contemporary, Crime, Erotica, Family Saga, Fantasy, Dark Fantasy, Gay and Lesbian, General Fiction, Graphic Novels, Historical Fiction, Horror, Humour, Literary Fiction, Military and Espionage, Mystery, Picture Books, Religious and Inspirational, Romance, Science Fiction, Thrillers and Suspense, Western, Women’s Fiction, Young Adult.