In Dash, you can group your assets into both Folders and Collections. They have similarities, but also a lot of differences, so here's the lowdown:
A folder is a type of hierarchical field. Folders are:
visible to all users (unless you have restricted them to specific user groups)
able to contain sub-folders
available in the Filters panel as a field you can use to filter assets by on the Browse page
permanent methods of organising your assets in your Dash.
A Collection is a private set of assets. Collections are:
only visible to the user that created them, unless they add other users as "collaborators"
not able to have a hierarchical structure
not able to be used as a filter when searching for assets in the Browse page
temporary stores for sets of assets for a specific purpose, e.g. to hold a selection of assets for sharing with an external recipient
able to contain assets from multiple folders.
Assets can be in as any folders or collections at once without duplication.
Generally speaking, folders are ideal for creating a fundamental structure to the organisation of your assets, that all your users will be able to see and navigate. Collections are better suited to personal groups of assets, often for temporary purposes.