A folder is a container for files, similar to a folder in a file cabinet. In fact, File Manager uses a folder icon to represent a folder. A folder can contain other folders--sometimes called subfolders. With folders and subfolders, you can create multiple layers of organization that form a hierarchy. In other contexts, folders are often referred to as directories.
Within any single folder, each file name must be unique. However, files in different folders may have the same name.