I think it depends on your goal. If I want to browse new chicken recipes, I am going to open the table of contents, find the section on poultry and start flipping through recipes. On the other hand, if I want to cook a chicken curry, I am going to go to the index and look up curry, then find the relevant page.

Folders are great for when you don't know what you want and just want to browse or explore based on broad topics. Tags/indexes are better when you know basically what you want, and you just need a way to find it or items similar to it.

Al entry should go in a single category, chapter or folder. The index should provide a useful overview. Tags you may have in any amount. More is usually better.

A tag with a single entry is useful. Chapters should never have a single entry.