Collections allow you to group citations together into folders.
To organize citations with collections:
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From within Zotero Standalone, click on the icon of the folder (top, left).
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You will be prompted to create a new collection.
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Type a name for your collection and click OK.
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Once your collection is created, you drag and drop citations into it.
OR,
if you have the collection highlighted,
you can use the Zotero Connector button to add a citation to Zotero Standalone and it will be saved automatically in that collection.
Please be aware if you export your Zotero library: tags will be retained but collections will not. See Zotero's documentation on collections and tags for detailed information on the topic.