There is some confusion out there of the difference between a custom single template for custom post type and a custom single template for a post category. When you create a template for a custom post type all you do is copy the single.php in your theme and name it single-{custom_post_type}.php. Creating a custom single.php template per post category is really quite simple as well but there are a few more steps required.

Step 1

Copy your single.php and rename it single-default.php.

Step 2

Copy your single.php and name it single-{category}.php

Step 3

In the single.php file delete all the code and replace it with the code below. The category news is being used as an example

<?php
  $post = $wp_query->post;
  if (in_category('news')) {
      include('single-news.php');
  } 
  else{
      include('single-default.php');
  }
?>

Simple as pie.

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