Hey Bhavana,

Here is my explanation to your question:

To understand folder, we can compare it as a container that contains data. This data is in the form of Document, Email Template, Report, or Dashboard.
It is capable of containing only one type of item.

These are the operations a folder performs:
1.create()
2.delete()
3.describeSObjects()
4.getDeleted()
5.getUpdated()
6.query()
7.retrieve()
8.update()
9.upsert()

Below are some special access rules to use a folder:

1. You must have the “Modify All Data” permission to create, update, or delete document folders and email template folders.
2. Customer Portal users can’t access this object.
3. To query this object, no special permissions are needed.
4. As of API version 35.0, when a folder is shared with a role, it is only visible to users in that role. Superior roles in the role hierarchy don’t gain visibility.
5. If analytics folder sharing is turned on, then users need these permissions to create and manage report folders and dashboard folders:
  “Create Dashboard Folders” “Create Report Folders”

Hope this explanation will help you out in understanding folder object. If you find it helpful, mark as a Best Answer so that other's also get help from this.

Thank you.
Akshay