Originally Posted by HarryT
No. Unfortunately on the Kindle Touch, unlike earlier models, the file which stores information about collections is not in the part of the file system that's visible to "the outside world", hence collections can only be managed on the Kindle itself.
Not entirely accurate. You can manage them on the pc/mac free programs, then on the Touch use the Import Collections functionality to import them into the Touch. Make sure all the books on the Touch are in collections prior to the import and to avoid problems make sure you have updated to 5.0.3. This is the only method other than the Touch itself to get collections on it.