If someone were to ask you where is the item, you could say "katika chumba". But if you were asked where you are, you say "chumbani".
the3lusive, I disagree - it depends on the whole sentence order - if you want to say "I am in my room." you might say either "Nipo chumbani kwangu." or "Nakaa katika chumba changu." but since the concordance changes, it can make it complicated (esp. with relativeclauses), so "katika" would often be preferred in such cases, even by mother tongue speakers.
2) on; upon
3) out of
6) in the middle of (doing an action)
"Katika" is used in cases when is not possible or unconfortable using ending " -ni ". Chumbami - in the room.