To delete a folder, first click the settings icon at the top of Folders on the side bar.
Click the X and the folder moves into your trash. Folders in the Trash can be recovered by clicking the undo button. Items in Trash are recoverable only for 30 days.
'Tagged' folder shown in orange is a system default folder and cannot be deleted.
TIP: When you delete a folder shared with multiple users, the folder will be deleted in other user accounts as well.