SharePoint 2013: Lookup or Taxonomy (Managed Metadata) Column
At First, you should consider software boundaries that may affect your choice. In a list you can have a max of 32 choice fields, and 16 lookup fields.
Next you must consider the requirements of your current and likely future projects when deciding which column types to use. The following table will help you evaluate the pros and cons of each column type.
Check this article for pros and cons for each column type!