I think Wikipedia describe it very good with example of the e-mail folder compared to a filesystem structured directory.
en.wikipedia.org
Folder metaphor
The name
folder, presenting an analogy to the
file folder used in offices, and used in a hierarchical file system design for the
Electronic Recording Machine, Accounting (ERMA) Mark 1 published in 1958
[5] as well as by
Xerox Star,
[6] is used in almost all modern
operating systems' desktop environments. Folders are often depicted with
icons which visually resemble physical file folders.
There is a difference between a
directory, which is a
file system concept, and the
graphical user interface metaphor that is used to represent it (a
folder).[
original research?] For example,
Microsoft Windows uses the concept of
special folders to help present the contents of the computer to the user in a fairly consistent way that frees the user from having to deal with absolute directory paths, which can vary between versions of Windows, and between individual installations. Many operating systems also have the concept of "smart folders" or
virtual folders that reflect the results of a file system search or other operation. These folders do not represent a directory in the file hierarchy. Many
email clients allow the creation of folders to organize email. These folders have no corresponding representation in the filesystem structure.
If one is referring to a
container of documents, the term
folder is more appropriate. [
citation needed] The term
directory refers to the way a structured list of document files and folders are stored on the computer. The distinction can be due to the way a directory is accessed; on Unix systems, /usr/bin/ is usually referred to as a directory when viewed in a
command line console, but if accessed through a graphical
file manager, users may sometimes call it a folder.