Content Folder is the location where your text content will be stored. When you are creating a content type, a folder with the same name as content type has been created for you. You can edit the folder or create a new folder.
To create a new folder.
Go to "Contents" -- "Contents".
Click on "New folder" to create a new folder.
Give your folder a name, and select the content type.
One folder must have and can only have one content type.
A folder can have relation with another folder. There are two type of relations
Category folders: It can be one to many or many to many relations. Used in the scenario like blog belongs to category or book has authors.
Embedded folders: Embedded folders contains content that only belong to current content item. Like a blog has a comment embedded folder.
On above screen, click on "Relation Folders", open the relation folders editing screen and choose the related folder.