Chakra represents a mix of essence of all living things in the ninja world and a tool which can be exploited through manipulation. The manipulation consists of changing the nature and shape of it. The manipulation of chakra begins at the core which is located right around the guts, and then transmitting it through a specific path comparable to the one of cardiovascular system chakra can be released from the body.
In my opinion, katon chakra is a specific type of elementary chakra. The makeup of this type is in correlation with heat. Katon chakra should be able to take different forms, although its essence is best showcased through unrestrained flames. However, there is also ash, and oil like texture which it can take.