MS Excel dependent dropdown list

I'm looking to create a dropdown list that is dependent on the contents of another cell.  This cell also happens to be a dropdown cell.  The reason is that there is a lot of potential valid data to enter but the main list of data can be broken down into more manageable groups and hence allow a quicker / easier selection of a smaller number of valid data inputs.

Does anybody know how to do this?

I have tried using the custom function in Data Validation and using the 'IF' function to generate the second dropdown list.  This works but only for one entry from the initial reference cell.  Adding further dependents by nesting the 'IF' function doesn't work!?!?