In iOS 12 you can create album folders in the Photos app. This offers much better photo organization. But the way to create them is a little hidden.
- Open Photos.
- Tap on the Albums icon at the bottom.
- Tap on See All.
- Tap on Edit in the upper-right corner, then tap the plus (+) button in the upper-left corner. You’ll see an option to create a new album or new folder.
- Type in a name for the folder and tap Save.
Now the folder is ready to contain albums, or other folders. Yes, folders can contain folders! Tap on the folder, and repeat the same steps. Tap on Edit, then the plus, to add new albums and folders. On iOS you can’t drag and drop folders into albums, so you’ll have to create a new album inside the folder, then manually select photos to add.