I'd think in terms of the way stores set things up first: Men's, women's, children's, and infants' and toddlers'.
Then I'd break down within categories: Dress/work clothes (dresses, skirts, and blouses for women; dress shirts and dress pants for men), casual clothes (jeans, a sub-category), sleepwear, under clothes, active wear, outer wear and formal wear (for the right categories).
Within those categories within categories, maybe:
Shirts: sleeveless, short-sleeve, long-sleeve Skirts: mini, knee-length, mid-calf, floor length Pants: shorts, mid-calf, long Robes: short, mid-calf, long Sleepwear: pajamas, nightgowns, robes etc. etc.
I definitely agree that dress/work and casual should be mentioned, but don't you think that should be included in a different section perhaps titled lifestyle? For example, if I were to go shopping online for shorts I would respond quicker to a section titled shorts rather than casual. However if I didn't have an objective I'd probably respond to casual because that is more my personality.
I definitely agree with both of you guys about sleepwear though. What if I was to add a section titled lifestyle and the categories of clothing we mentioned would be within this section. I think most likely I would include: