A folder's position in the folder tree is defined by its parent-child relationships. A folder that contains other folders is a parent folder. The folders residing within a parent are called child folders. Child folders can also be parent folders to the folders they contain.
In the illustration above, a folder named HR - Employees is the parent to the Employee Record for ANDREW LINCOLN folder, which is the parent to the Employee Documents folder. The Employee Documents folder is the child to Employee Record for ANDREW LINCOLN, and Employee Record for ANDREW LINCOLN is the child to HR - Employees. Notice Employee Record for ANDREW LINCOLN is both a parent and a child folder, depending on the context.