Essentially collections are tags that you can define and add to your templates in order to organise or group them. You can add multiple collections to a template. Say you have a template using Pipedrive CRM, you may want to tag it with "CRM", but also other keywords that maybe refer to the content of the particular template like "Contacts" or "Deals".
You can add a collection to a template right when you create it. Just create a new template and select one or many collections to add to your template. You may also create new collections within the dropdown menu.
Another way to add or remove collections to templates is via the template overview. Go to My Templates to see an overview of all your templates. You can even filter them by collection by choosing collection under in the "show by section". Templates that are not assigned to any collection, are listed as "unassigned". You can select one or multiple templates and use Assign to collection to tag your templates accordingly. From this view you can also create new collections if you like.
You can use the list to also assign or remove collections to a single template. However you can also click on show details to open the details page. Using the dropdown under collections lets you add collections to the template.
You can also manage collections independently from a template. If you for instance want to delete or rename and existing collection, you may do so in the System Settings. Just navigate to Setting → Collections. Here you find an overview of all your collections and get the option to edit or delete when you hover over a list item. You may also create new collections here.