Is it a MUST to have both itunes library and itunes music folder?

I just noticed I have 22 GB of music in itunes library (itunes application) and also 22GB of music in itunes music folder. Do I need to have both folders active? What would happen if I delete all the music in itunes music folder? Should that delete all the songs in my itunes application?
Thanks.

The iTunes Library is a database file, it contains references to songs you've added to the library, their location on your hard drive, playlists, ratings etc. The library does not contain the actual song files. The iTunes Music Folder is the folder that contains the song and other media files. Deleting the folder that contains the songs would mean the the library couldn't locate them (because they would no longer exist) and there would be nothing to play. The iTunes application (the actual program) resides in your Applications folder. You'll get more information including the Folder/File structure in this article: What are the iTunes library files?

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