Most computers have a main storage drive called C: drive. This is where all the main Folders (or directories)  are stored. Inside these folders are more folders (sub-folders/sub-directories) storing more information. There are no rules to limit  how many folders you have on your computer.

CD's and DVD's can also have Folder systems as they also used for data storage and backup. If you copy a folder to a CD it will also copy all sub-folders that are contained within.