I came up with a grading system that I use to divide my items up in 5 gallon buckets with lids on them.
Grade A:
Any item that I feel is safe to use on exterior paint/glass surfaces. I then have specific towels/items within this grade for drying the paint surface, for drying the windows, for removing wax/polish, for applying quick detailer, for applying wax/sealants, and for paint correction. For me at least I like to really divide up my "Grade A" items as much as possible to prevent scratching and to prevent getting items such as wax on my windows.
Grade B:
Any item that I feel is safe to use on the interior of the car only. I don't do a lot of subdividing within this grade, but I do like to keep the applicators for items such as leather cleaner/condition and dressings separate.
Grade C:
Any item that I feel can only be used in door jams, engines, wheels, or other super dirty areas. I don't do any subdividing at this grade level this is pretty much my "rag" category.
Grade F:
Any item that is dirty and needs to be washed. I keep these items divided according to their corresponding grade level above and only wash items that are from the same grade together.
So to the point once I have washed my items I still keep them in the same grade level, for example a Grade C item would never become a Grade A item just because it was washed. The same goes for subdivided items within a grade as well, for example a Grade A item that is used for wax removal would not later be used for applying a quick detailer. Also in case you were wondering I use the larger 2+ gallon ziplock bags to subdivide my items within the 5 gallon buckets.