The problem of categorization (or classification or concept formation) is fundamental to cognition. Categorization organizes sensory input into categories or groups which are 'similar' and often we give it a name - for example 'human', 'dog' or 'neem tree'. And one central question in cognition, that is yet to be answered, is how do humans (or animals) categorize. There are many (approx. a dozen) theories on how humans categorize.
The project requires you to pick one of the theories/formal models of categorization (see below) and build a computational model for it. Categorization can be supervised or unsurpervised and some models may handle only one kind of categorization. There is even a debate on whether the two kinds are distinct or just variants of a single latent process.
The models from which you can choose are available in the book:Each article in the book that discusses a particular model also contains more references that are relevant.
In your project you have to write a program that implements the model of your choice and then show how the model explains some actual human data and/or predicts some behavioural data that is present in the literature and/or suggests a specific behavioural outcome that the model predicts that is new and not in the literature. You are also expected to be thoroughly familiar with the model you are implementing.