The collections come back from the Kobo Cloud.
With the SD card in your device, and all the collections showing, connect to your PC.
In calibre select Kobo Utilities and then select Database and Fix Duplicate Shelves. Choose whether to keep the Oldest or Newest shelves and then click OK.
This will go through and remove the extra shelves, and also flag them so that the next sync to the Kobo cloud will remove them from the Kobo cloud.
Then eject and all is done.
To be safe, I'd then do a sync with Kobo, either via WiFi or Kobo Desktop.
As far as setting up and managing the collections, total handle that via calibre. See
Quick Guide to Shelf Management with calibre 0.9.1 & above (Touch / Glo / Mini /Aura)