She folded the handkerchief neatly.

Literal

She [topic-は] handkerchief [object-を] neatly folded.

きちんと is an essential Japanese adverb for orderly, proper, careful execution — neatly, properly, tidily, on time, by the rules. It's a near-mimetic that overlaps in some uses with the more formal 正しく ('correctly') and the more casual ちゃんと ('properly, properly behaved'). 畳む ('to fold') is the verb for folding cloth, paper, futons; in Japan, the daily folding of futons (布団を畳む) is a household routine, and the everyday handkerchief (ハンカチ) is itself a ubiquitous accessory often expected as part of one's daily-carry. 畳 in this verb is the same kanji as 畳 ('tatami mat'), reflecting the deep cultural connection between folding and Japan's traditional foldable interior arrangements.