ReadMe files should be used to describe your project and your data. When depositing data into repositories, you'll likely include a ReadMe file that just explains the files you've deposited. When you're keeping ReadMe files for your own records, it's good to have a top-folder ReadMe that explains all the subfolders and files that are part of the project as well as having them for lower-level files.
These two resources give great overviews of ReadMe files and guidance on how to create them:
Here's some guidance from two popular repositories that recommend and use ReadMe file:
