Workspaces allow you to pin files from your Google Drive into shortcut type areas and allow you to group files that may seem unrelated into one area. You can add any type of file to a Workspace, this includes but is not limited to, Docs, Sheets, Slides, Forms, PDFs, etc. As long as the file is in your Google Drive, it can be added to a Workspace.
Why use Workspaces when you already have things organized in folders? There are a few features Workspaces offer that folders cannot. You can add files to the same Workspace from your My Drive, Shared Drives, and Shared with me. This is the first (and only) way to organize your Shared with me section. As I mentioned before, Workspaces allows you to group files that may seem unrelated into one area, and it does this without disrupting your folder organization. Since you can add files from anywhere in any drive, you can a couple files from several different folders without messing up your organization. Let's look at an example Workspace to get a better idea.
The Workspaces above are ones I created in my own Drive. I created one for files I frequently use at the beginning of the school year and the end of the school year. These files are located in Shared Drives in various folders, and while I use them frequently at the respective times of the year, I don't want to mess up the organization of those folders, especially since more than just I use them. Creating a Workspace for things that are shared with you frequently such as EOC testing materials, or IEP materials is also a good idea.
You can create a Workspace two ways. The first way you can create a Workspace is shown in the picture above, where you can create it from the Priority section. The second way is by simply right clicking on any file in your Drive and selecting Add to Workspace.
This allows you to add files to Workspaces and if you did not create one a head of time, you can create one on the fly as well. You can also add files from the Priority section either when you first create a Workspace or later on.
I hope this helped you get to know a Google feature you didn't already know before. If you have any questions or comments, please feel free to leave them in the comments section.