Files are stored in folder. E.g. A compact disc is a folder and any software installed in it is a file.
Other than pc terms, a folder is a small book usually having a paper cover, and files are papers wrapped in folder. The icons which you see in windows are various folders. And whatever you store in them are termed as files. It can be a song, game, software etc. However, windows gives us benefit of storing a folder in a "folder". In really, I am afraid , you can't do it in everyday life.
Other than pc terms, a folder is a small book usually having a paper cover, and files are papers wrapped in folder. The icons which you see in windows are various folders. And whatever you store in them are termed as files. It can be a song, game, software etc. However, windows gives us benefit of storing a folder in a "folder". In really, I am afraid , you can't do it in everyday life.