In some cases there will be a folder inside a folder, which may cause you to get the notification you got before, in this case do the same thing and drop the files from the mod's folder to the corresponding folder(s). So to fix this, you want to open up the folder you're trying to install, and drag all the files inside the folder to the corresponding folder in 'Data Files' so if the folder is 'Meshes', drag the files from the mod's 'Meshes' folder, into the Data File's 'Meshes' folder. In this case there is, as stated by the notification, already a file/folder with the name of file/folder you are trying to install, you NEVER want to replace the file/folder if you get this notification as you may make the game unplayable and/or cause some errors. Important Note: If a window pops up saying there is already a folder/file with that name, do NOT replace it, click cancel. Now, a mod will usually come with a mesh and textures folder and assuming you don't have any mods installed at the moment, you can simply drag and drop both those folders in the 'Data Files' folder. In the 'drive_c' folder, navigate to Program Files/Steam/steamapps/common/morrowind/Data Files

Click on the bottle you have Steam/Morrowind installed on so that it's highlighted Open CXG, select Configure>Manage Bottles from the Menu Bar No worries, just follow these simple steps. So you've got some morrowind mods you want to install but you have no clue how to do that.

Morrowind installation directory steam