In Magento , There can be a tree of category with thousands of products. By default the category will only show its products , it may not show its subcategories products.
You can make it possible by following steps.
3.Click on Parent Category ,whose subcat products are required to be shown.
4.Click on Display Settings
5.Is Anchor select it to Yes
6.Click Save Category (Right Top)
7.Now goto System> Index Management
8.Select All> Reindex Data Submit
and You are done!!
Sub Category Products Show in Category