A folder is a location where you can store your files. You can create any number of folders and even store folders inside other folders (subfolders).
By default, you can use the New context menu to create a new folder.
This tutorial will show you how to add a direct New folder context menu for all users to directly create a new folder in Windows 10.
This can be handy to streamline creating a new folder by being one click faster than using the New context menu.