File names can be duplicated across different folders within the same storage device. A folder (directory) acts as a container, separating its contents from other folders. Each file is uniquely identified by its full pathname, which combines the sequence of folders leading to it with the specific file name. This hierarchical structure allows the same name (like "report.txt") to be used independently within distinct folders without conflict, unlike flat naming systems where every name must be globally unique.

For example, a user might have a "report.txt" file in their "Documents\Work\ProjectA" folder and another different file named "report.txt" in their "Documents\Personal" folder. On a larger scale, web servers often store separate "index.html" files in different website directories, each being a distinct file accessible via a different URL path.

The primary advantage is organizational flexibility, allowing users to logically group related files without worrying about name clashes elsewhere. A limitation is potential confusion if users rely solely on filenames without considering the file path; software must use full paths to specify which exact file is intended. While generally benign, deliberate use of identical filenames for deceptive purposes across folders could be an integrity concern, though rare. Hierarchical organization remains fundamental to most file systems.