The groups / group sets in EndNote can help you to organize your references by topics, which is like folders.
Custom Group: Add references manually or dragging references to groups.
[EndNote] > [Groups] > [Create Group]. Or mouse on a group set and then right click to create a group.
Smart Group: Define the search terms which references will be imported or updated automatically to the group.
[EndNote] > [Groups] > [Create Smart Group]. Or mouse on a group set and then right click to create a smart group.
Group Set: A set of custom groups or smart groups.
[EndNote] > [Groups] > [Create Group Set]. Or mouse on a group set and then right click to create group set.