The subject of directories and subdirectories is one of the hardest concepts for people to understand but a very necessary part of automating your day-to-day business operations with your computer.
Regardless of whether you work in DOS or Windows - you need to group similar files together so you can find them easier and for your computer to function more properly. It's kind of like moving into a new neighborhood only to find your favorite supermarket on the east side of town, your barber shop on the west side, your post office in the north end and your babysitter in the south end. You would be spending more time commuting back and forth between all these places than if they were all grouped together just a few miles from your house.
The easiest way to help you understand how subdirectories and directories work, is best understood by anyone who has worked in an office environment before. Every office contained a file cabinet with separate folders for letters of the alphabet. Normally, each letter of the alphabet was also separated into manila folders, each continuing information on a certain person or company. Your telephone directory is even organized in this similar manner.
Directories and subdirectories on a computer system is EXACTLY the same thing. Your computer hard drive is the main file cabinet. A directory is similar to every letter of the alphabet. A subdirectory is similar to the separate manila folders that go inside the particular directory. But the great thing about a computer system is that there is NO LIMIT to the subdirectories you can make. Your file cabinet would get too big if you did this.
That's why, when you purchase a new software program, you make one directory for it - then copy the files to make the program work "into" it. (If your software comes with a self-installing program, it will automatically do this for you.) For example, I have a main directory called "Graphics" on my hard drive. Then I have several subdirectories "inside" this main "Graphics" directory called "People," "Animals," "Office," etc. This way, when I want a graphic of a person, I will know to look for it in the main "Graphics" directory, inside the "People" subdirectory.