Xcode groups hierarchy isn't mimic'd in the file structure
using Cocos2d project template (for objective c)
I've got a nice little hierarchy setup in Xcode, e.g categorization with folders, multiple levels, however in the file structure, its just one big directory of files, should I leave it like that? Should I replicate the hierarchy in file structure manually? Should it be automated did I do something wrong?
As Protheus says, the group structure in XCode is for organizational purposes only and not synced with the file system. For some projects though, it might be worth to keep XCode's group structure and the file system in sync. For example, I like to edit my files with VIM from the command line sometimes. On big projects with several hundreds of files, it is much easier to find specific files if you have a logical structure in the file system.
I discuss this in more detail in this blog article.
As far as I know neither structure in xcode, nor structure in project folder affect the program. You structure it all for your convinience only.