File system directory hierarchy. Can contain files and subdirectories.
Directory[] gives the current working directory.
$InitialDirectory gives the initial directory when the current Mathematica session was started.
$InstallationDirectory gives the top-level directory in which your Mathematica installation resides.
$UserDocumentsDirectory gives your default "documents" directory.
$RootDirectory gives the root directory of your file system.
ResetDirectory[] resets the current working directory to its previous value.
$HomeDirectory gives your "home" directory.
ParentDirectory[] gives the parent of the current working directory. ParentDirectory["dir"] gives the parent of the directory dir.