How does a human classify or cluster data? Here, what I mean by DATA are text documents.

I am going to do a research on text clustering algorithms by the help of artificial neural networks (ANNs). But first of all I need to know how our brain (neural system) cluster (or classify) text data while we are reading a document.

Imagine we are reading some uncategorized and scattered news articles around the internet (For example on a weblog). Here, when we read an article, we'll easily find out that what it is about or what group it goes under: Politics, Sports, Economic, etc. We'll know it by the help of words inside the article, I know.

How does our brain cluster these data inside itself. How do we make clusters/categories inside our brain, and then assign data to them?
Here is an article written on a study on the measured effects of blood flow in the brain from "two hours of movie trailers that contained over 1,700 categories of actions and objects". A video (attached in the article) describes the methods used and the results of the study. They found that the brain tended to categorize things that shared similar functions or is-a relationships. This can be seen in the resulting chart, where the nodes representing "mammals", "people" and "communication verbs" are closely related. The brain also seemed to separate things that moved or were considered to be alive and inanimate objects. 

This study was done using only 5 participants so it's fair to say that more research needs to be done before we can uncover more of the truth concerning this topic. 

To answer your second question, regarding how information is stored in the brain, we need to understand a process called "encoding". I don't fully understand how this process works on a biological level, but as a gross explanation the brain stores sensory information it deems important and then goes through a secondary process called "consolidation". This process aims to stabilize the trace of a memory after it is initially encoded. The final process, "retrieval" is the act of remembering the information. During this stage the brain reconstructs the memory or information and thereby strengthens the neural pathway that makes up that memory. 

So in short, the brain stores information through complex neural connections. These neural connections are tied to the sensory information that was initially perceived, which is reconstructed when you remember it.

Hope I was able to clear up some of your questions :)