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Group Items on Their Folder Name Inside a SharePoint Library
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Some time ago a client asked me if you could create a view where all the documents are grouped on the folder name. The folders were used to set the permissions on documents, so they could not be removed.
As you probably will know, folders could not be used in views to group documents. You could only group documents on their metadata.
A possible solution could be to add a new metadata field to the content type and manually add the folder name as the metadata value. It is very easy to add and requires no custom development, but it requires an extra manual step from the document creator.
This manual step can also be automated by a SharePoint 2010 Document library functionality called Column default value settings. It can be found on the document library settings page under the General settings section.
The Column default value settings enable you to define a default value for a metadata column per folder.