The setup instructions can be found in the plugin's Help section inside RPG Maker MZ's Plugin Manager.
A quick overview:
• Materia are created as Armor entries in the database.
• Skills are created in the Skills database and linked to Materia using the plugin's notetags.
• AP requirements are set through the skill notetags.
• Equipment slots are added to weapons and armor using the slot notetags described in the plugin help.
• Icons are selected using RPG Maker's normal icon system (the Icon Index field in the database). If you're using a custom IconSet, place it where RPG Maker normally expects it ("img/system/").
You do not need to create any special folders for Materia or their data. Everything is configured through the database and notetags.
The only optional assets that use folders are things like custom windowskins, which can be selected from the standard "img/system/" folder through the plugin parameters.
I will add a demo project soon for better guidance.