WHAT: Folders are simple structures used to store and organize files. Unlike spaces, folders can contain only files. They cannot contain users.
Folders are subject to the same cascading metadata flows that apply to Chorus spaces. Every folder inherits the metadata of the space in which it is located. In turn, any subfolders of these folders will inherit metadata, too.
WHY: Organizing files in folders within spaces gives you an extra level of control over your files. The ability to apply and edit metadata on an entire folder of files makes fast work of tagging. The ability for metadata to cascade avoid you repeating metadata tagging work unnecessarily.
Managing many folders? Try changing your viewing pane settings to list view.