Dolphin 7.0.9 BETA 2

agree tagged.com, facebook.com, badoo.com and hi5.com they using this funtion and auto cities by member IP

Not a bug. We've been tinkering this many many many times. Category names are content - not interface text, and thus may not be translated. In most (if not all) use-cases translated categories make no sees, because they still have to lead to certain content, which may not be posted in different languages.

Say, your users publish blog posts about "mushrooms"... If you translate the "Mushrooms" category and get somewhere to click on the link in, say, Russian language - they'd see more expect posts in Russian, but they'd get the whole mix. Translated category would imply translated content. Moreover, there's a slew of semantic issues with choosing categories when they're available in different languages. User categories may not be translated by definition. Etc, etc. The only natural way to tackle this is to create multiple categories using different languages, but not translating same categories.