Well you're not massively far off. The need to structure/categorise isn't holding us down, it makes us possible. Imagine life or knowledge with no categories of anything at all. It's senseless chaos. So in that sense you can't throw it out, but Foucault did believe human bodies were subjected to this process to a greater and more deliberate degree in the late modern era than ever before. As an example, older notions of good soldiers emphasised personal bravery or prowess, but in the restructuring of more recent militaries discipline and machine-like consistency are emphasised. He says something in Discipline and Punish about how after the Napoleonic reforms there were 22 discrete muscle movements performed in proper sequence to bring one's rifle to the firing position. So we can see the body being more tightly controlled than brave heart swinging a claymore over his head and hollering about freedom.

You were right to miss seeing how Foucault would structure society. He was curiously reticent about a lot of political issues. He was noted for his blase response to the '68 uprisings. He was broadly leftist, but squeamish about party affiliations and pretty idiosyncratic generally.