Creating a dynamic category index page

This should really be straight forward, but I’m struggling setting up a basic category index page, i.e. a page that lists all entries that belong to a certain category.

What I’ve done so far:

Admin > Channel Admin > Global Channel Prefs > Use Category URL Titles In Links? - YES Admin > Channel Admin > Global Channel Prefs > Category URL Indicator - category

Admin > Channel Admin > Categories: I’ve set up one category group with three dummy categories (“Category One”, “Category Two” and “Category Three”).

I’ve assigned each entry to one of these categories.

I’ve set up a template “index.html” for the “blog” template group, and also a template “categories.html” for the same group.

My question is now: How do I activate this “categories.html” template when the user wants to see all entries of a specific category?

How would the {channel:entries} query look like to dynamically return entries for the category shown in segment 3? (e.g. /blog/category/category-two)

Thanks for your help!