My book says that:
A monoid is a set M equipped with a binary operation $.:M\times M\to M$ and a distinguished unit element $u\in M$ such that for all $x,y,z\in M$:
$$x\cdot(y\cdot z) = (x\cdot y)\cdot z$$ and
$$u\cdot x = x = x\cdot u$$
Equivalently, a monoid is a category with just one object. The arrows of the category are the elements of the monoid. In particular, the identity arrows is the unit element $u$
So, a monoid is a category with just one object. What it means exactly? $M$ has more than one object. Later the book cites $\mathbb{N}$ as being a monoid. Why?
The monoid $M$ may have more than one element, but the elements of the monoid are not objects of the category in question.
The category in question is defined as the category whose sole object is $M$, and whose morphisms are the elements of $M$, where composition is defined as element-wise multiplication in the monoid.
The key is to then verify that the axioms for a category are satisfied.