Creating folders (otherwise known as collections) can help you organize your library. To create a new collection, click on the yellow folder/plus sgn icon. A pop-up box will open prompting you to name your new collection. Once your new collection is established, you can drag and drop items into it either from your desktop or from within your Zotero library. Note that every time you drag an item into a new collection from your Zotero library, a copy will be made of that item will be made.
You can create sub-collections using the same method. You can also drag and drop collections into other collections.
When you add a reference to your Zotero library, it imports them. You can add tags to your references to make them easier to find later.