I wish to allow only one person a moderator or two people in a certain category or forum. In the admin area it seems I can only allow a group to be a moderator of a category not just one person. Is it possible to allow only one person to be a moderator?

And if it is possible, can they keep their group color when it shows the moderator on the category?

You can show One person but they won't keep their color.

Admin Panel>>User & Groups>>Search User>>Click on the user you want to make a Mod>>Click On permissions>>Click the Section(s)>>Save