Folders are containers in which to organize sets of items such as Projects, User Lists, Workstations, Questionnaires etc.
Each Context defined at the root of your server (you might only have one Context) comes with its unique set of 7 Master Folders (Projects, Users, Webspaces, Workstations, Questionnaires, Settings and System Modules). All user-created folders are contained within a Master folder.
Folders are particularly important for assigning and controlling user access to specified subsets of items within the Navigation Tree. Administrators choose which folders a User List (i.e. their users) may have access rights to. See User Rights. When a user logs in, the authentication he/she provides determines which folders are made accessible.
Note: Administrators have access to the System Master Folder located at the Root of the Directory Tree.