Drag one app on top of another to create the folder, then continue dragging apps into it until you have them as you want them. To create a second folder start the process again.
Before you ask, you can't drag Newsstand into a folder. You just have to dump it on the last page of your homescreen so you don't have to look at it.
Further to Kevin's advice, you need to long press an app until it jiggles, then place your finger on them and slide them. You can have up to 20 apps in a folder which can then be renamed, as long as it is still jiggling by touching the X on the title line and then type the name you want.
The IPad Forum is a community of members from all walks of life and from all over the world coming together to share our experiences and to help each other learn about this wonderful piece of technology the Ipad. There is a wealth of information already here in the many threads we have so doing some searches will answer most of the questions you have. If then you cannot find the answer you are seeking then by all means post your question. There are many friendly and informed members here only too willing to help you.