Create CPT and Custom Taxonomy for CPT

functions.php

add_action( 'init', 'create_post_type' );

    function create_post_type() {
        register_post_type( 'faq',
            array(
                'labels' => array(
                    'name' => __( 'FAQ' ),
                    'singular_name' => __( 'FAQ' )
                ),
            'public' => true,
            'has_archive' => false,
            'taxonomies'  => array( 'faq_category' ),

            )
        );
    }


/**
 *  faqs_hierarchical_taxonomy
 */

add_action( 'init', 'faq_hierarchical_taxonomy', 0 );

function faq_hierarchical_taxonomy() {

  $labels = array(
    'name' => _x( 'FAQ Categories', 'taxonomy general name' ),
    'singular_name' => _x( 'FAQ', 'taxonomy singular name' ),
    'search_items' =>  __( 'Search FAQs' ),
    'popular_items' => __( 'Popular FAQs' ),
    'all_items' => __( 'All FAQs' ),
    'parent_item' => null,
    'parent_item_colon' => null,
    'edit_item' => __( 'Edit FAQ' ),
    'update_item' => __( 'Update FAQ' ),
    'add_new_item' => __( 'Add New FAQ' ),
    'new_item_name' => __( 'New FAQ Name' ),
    'separate_items_with_commas' => __( 'Separate FAQs with commas' ),
    'add_or_remove_items' => __( 'Add or remove FAQs' ),
    'choose_from_most_used' => __( 'Choose from the most used FAQs' ),
    'menu_name' => __( 'FAQ Category' ),
  );

  register_taxonomy('faqs_category','faq',array(
    'hierarchical' => true,
    'labels' => $labels,
    'show_ui' => true,
    'show_admin_column' => true,
    'update_count_callback' => '_update_post_term_count',
    'query_var' => true,
    'rewrite' => array( 'slug' => 'faq_category' ),
  ));
}