As a user, you create them - simply right click on the folder named "User managed user folders" and click on the option "Create Sub Folder..."
You can manage them (Edit, Rename, Delete) - simply right click on the folder to manage and click on the corresponding option "Edit..." or "Rename..." or "Delete..."
You can create sub folders under a folder to any level of nesting - simply right click on the folder under which to create sub folder and click on the option "Create Sub Folder..."
Only the lowest level folder can contain any template in it
You can drag/drop templates into the lowest level folder
You can also use menu option to add selected templates to a folder (instead of drag/drop)
A folder can have any number of templates inside it
To display the templates in a folder, simply click on it
By default, when you create this type of Folder, same folder is ALSO automatically created for Listings and Sales. To change this behavior, change your preferences.