In Sitemason, Folders behave the same way you would expect a folder on your desktop computer to work. Create a folder, put pages in that folder, and you have a new site section. Folders are integral to maintaining the site hierarchy. It's another great user experience that differentiates Sitemason from the open source CMS's. Knowing where your content "lives" is as easy as navigating through folders. It's how you organize content on your desktop and in real life, and Sitemason extends that concept to the CMS.
Most importantly, a Folder needs a Path to define its location in your website. For example, if you have a section in your website called "About Us", you would want to give the Folder a Path "about-us" or similar. So if you then add a page to that Folder called "Our History", you would expect that page to be at the location yourwebsite.com/about-us/our-history.
In addition to the Title and Path, Folders contain the same setting options as the parent Site Settings. You can read about Site Settings in more detail in the Basic Site Management tutorial. Folders will inherit the parent Site Settings, but you can override them by editing the Folder Settings. This might be useful for updating a Folder's Description or if you need to use a different Google Analytics code for a specific section.
As mentioned, navigation management is at the center of the Sitemason CMS, and including your Folders in the navigation is done by selecting "Include in Navigation" in the Folder Settings. It's important to note that if a Folder is not selected to be in the navigation, no pages within that Folder will be listed in the navigation either.