My latest folly has been to open a book about Category Theory (CT in Context). My scribbles in the following picture reveal my consternation in the highlighted blue line. "a computation involving covering spaces," and the line following. On the next page, the proof concludes,
...which carries the generator $1\in \mathbb Z$ to itself $(0\ne 1)$. This contradiction proves that the retraction $r$ cannot exist, and so $f$ must have a fixed point.
Questions:
a. I don't follow how we arrive that the functor $\pi_1(S^1)=\mathbb Z$ , or that $\pi_1(D^2) = 0$.
b. the composite endomorphism of $\mathbb Z$ must be zero because "it factors through the trivial group." What is the meaning of this sentence?

I think you're missing the point of the book, at least for your question a. The intent is to show how functoriality can be used in a concrete situation, not to provide a complete self-contained proof of the Brouwer theorem. The fact that $\pi_1(S^1)=\mathbb{Z}$ and $\pi_1(D^2)=0$ are explicitly stated as "black box" statements. If you want to see proofs, you can take a look at any book covering fundamental groups, those are probably the first two computations you will encounter (for $D^2$, it follows easily from the fact that a disk is contractible, and for $S^1$ one has to work out a notion of degree of a map $S^1\to S^1$, in some form or another).
Question b is more in line with the spirit of the book. The whole point of the proof is to convince you that if you can construct $f$ with no fixed point, then you can use it to define maps $S^1\to D^2\to S^1$ whose composition is the identity, and then showcase how functoriality is useful in such a situation. Indeed, since you "know" that $\pi_1(D^2)=0$ (or at least you are supposed to accept that fact if you don't know it), then the induced maps on the level of fundamental groups have the form $\mathbb{Z}\to 0\to \mathbb{Z}$, so since there is the trivial group in the middle, the composition must be the zero map. But functoriality also guarantees that the identity map (of topological spaces) is sent to the identity map (of groups), which gives a contradiction.
To summarize my point: this is not intended as a proof which teaches you something about topology, but as a proof which teaches you how functoriality works in practice.