A file is a document that your reader will print. If you publish a 25 page book as one file, your reader will have to print the entire book. If you publish a 25 page book divided into five chapters as one file, your reader will have to print the entire book. If you publish it as five or six files, he or she will be able to print the individual chapters. That's up to you.
Some writers place their documents in one directory and their graphics in another.
Others create separate directories for chapters. Still others put all of their files in one directory. It's your preference. Do whatever is easiest for you to maintain. One caution, however.