Many many moons ago, somebody thought it would be a good idea to develop a means of compressing files so that they could be archived, carried around on floppy disks, etc.
The most popular method of doing this was to create a compressed file which was called a zip file. Later, it was decided that it would be even more useful if you could zip up folders and their subfolders, retaining the directory structure, so that (for example) you could zip up (compress) an entire collection of folders, send them (for example) to someone else, and that person would then be able to uncompress the files and recover the entire folder with all its contents, including other folders, which would also contain all their original contents, including folders.
This was extremely useful, but you needed a special program in order to compress (zip) and uncompress (unzip) the files. Not very long ago, Microsoft decided it would be a good idea if Windows could do the same job. In doing so, they decided to present the zip files just as if they had already been unzipped.
So, when you see a zipped folder and all it's contents in Windows Explorer, what you are really doing is looking inside a single file that has been compressed.