[Sirtel]

Calibre is a desktop program for Windows, Linux and MacOS. It can't be installed on an ereader.

Automatic collection management on a Kobo is via Calibre, yes. First, you must add all your ebook files to Calibre, then organize them in the Calibre GUI (with tags, custom categories like genres, in whatever way you want). That's not the same as moving a book physically to a folder: a book can be physically in only one folder, but can have as many tags, genres, custom categories as you want, there's no limit, and accordingly it can be in several collections at the same time.

After you've organized your books in Calibre, set the metadata management to automatic in Preferences, specify which column (i.e. category) you want to use for collection creating in the Kobo driver settings and connect your Libra to your computer with an USB cable. After your Libra has connected to Calibre, transfer the books from Calibre to the Libra (using the Send to Device icon). Collections and other metadata should automatically come over with them. After the books have been transferred, eject your Libra, but don't disconnect the cable; your Kobo must process the books. You should see the "Importing new books" screen. Disconnect the cable after the importing has finished. Your books should now all be in their collections.

If all this feels like too much work, you can create collections manually on a Kobo without Calibre. But if you don't make a backup of your Kobo database, your collections will be lost if you ever reset your Kobo for whatever reason. With Calibre, they'll be automatically recreated when you connect your Kobo.