IPhoto managed library imported like a referenced library?

Hi there,
I originally tried to work a referenced library on my new Macbook, changed my mind, deleted all practice libraries and tried to import again.  Checked the box saying somethign about 'copy photos to library' in preferences.  Now when I have imported it is still looking like a referenced library by using all my folder titles from my old PC filing system.  I thought that by going managed, everything would sort into date under events and I would have to rename them and create new folders etc as I needed.  I have now tried this twice, deleting the library completely from Trash before starting again to ensure I wasnt pulling up the original one that wasnt correct.
Any suggestions on what might be causing this?  Or is this how it should be working, using folder structure from filing system?
Cant figure out how to do a screen shot to show how it looks, but let me know if that is helps and I will learn something else new today.
Cheers,
Cathy

Thanks Larry,  I am using the File>Import to Library and then just selecting the 'pictures' folder from the external hard drive.  Within that folder there are 2007, 2008 etc folders and then within the years there are 2013-10-01 Event name folders.  The folders showing in iPhoto import are the year and event level photos. 
Another weird thing that is happening, not sure if it jsut coz this is the first time I have set it up, but it is 'updating thumbnails' on every open - takes ages so eventually I just stay 'finish later' but as a consequence only maybe 50-60% of the thumbnails are visible - the other folders just have a black square representing them.  I can open the photos but no thub nails are visible.

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