You used the verb form that would follow the pronoun that you could replace the noun with.
So for singular nouns, use the verb form for "he/she/it", and for plural nouns, use the verb form for "they".
For example, die Katze frisst just like sie frisst (the cat is eating, just like it is eating), and die Katzen fressen just like sie fressen (the cats are eating, just like they are eating).
I'm confused in frisst that whether it is is eating or eat how can we indentify it
Without context, both are possible translations. Pick one; it doesn't really matter which, as both will be accepted.
If there is context (e.g. "right now" or "every day"), then use the rules of English grammar to determine which tense is required.
Isn't Fisch countable in German?
It can be countable or uncountable.
In this sentence, it's uncountable: a certain amount of fish meat, which could be part of one fish (e.g. a bit of tuna), an entire fish, or several small fish.
Why not Die Katze frisst Fische?
That would be used if the cat were eating several whole fish.