Machine Learning Problem : I have a doubt in one of my feature which has an categorical value 1. One way of dealing with it would be like converting those values into numbers means in ordinal form. But the problem with this would be my model could have learned the relation as 1<2<3 which is not true in terms of categorical values 2. Other way would be converting values into one hot encoding but it could increase the dementionality and can make my data very sparse So how to deal with that type of problem?
Some of people said to use model like xgboost which handles the categorical values but how they internally tackle that?