I think a reader should be able to nominate a fic in whatever category they think it fits, even if they end up nominating it in two or three categories. For example, say I read a great crossover that was also a great romance. If I think that story is one of the best I've read in either category, I'd like to be able to nominate it in both. And, if the story actually wins in both, that just shows what an awesome story it is, which is what awards are all about.
I also agree that, during nominations, letting everyone nominate their dream list of nominees in each category will help with this issue. My five nominees for best crossover will be different from the next person's, or the next, which will ensure there's lots of variety. It will also increase the chances of having at least five nominations in each category. (Which I've seen turn out to be a problem in a lot of fic awards.)
(Of course, people doing the nominating should be free to pick only one story per category if they want.)
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