Like erAck mentioned, what you're describing is using physical albums (instead of virtual albums where all of your photos end up under Piwigo's uploads folder). I prefer to organize my photos in physical albums.

So yes, you can do this. I have all of my photos on a NAS, so under Piwigo's "galleries" folder I created symlinks to the folders on my NAS:

14:18:46 /usr/local/piwigo/galleries:$ ls -la
total 12
drwxr-xr-x  2 www-data www-data 4096 Dec 28  2014 .
drwxr-xr-x 13 www-data www-data 4096 Jul 28 20:54 ..
lrwxrwxrwx  1 root     root       26 Dec 28  2014 events -> /mnt/media/Pictures/Events
-rwxr-xr-x  1 www-data www-data 1765 Apr 24  2017 index.php
lrwxrwxrwx  1 root     root       24 Dec 28  2014 misc -> /mnt/media/Pictures/Misc
lrwxrwxrwx  1 root     root       26 Dec 28  2014 people -> /mnt/media/Pictures/People
lrwxrwxrwx  1 root     root       26 Dec 28  2014 places -> /mnt/media/Pictures/Places
14:18:47 /usr/local/piwigo/galleries:$

Each of those main folders contains multiple sub-folders, but those four are the top hierarchy of my gallery. (you can get a sense of this by checking out my gallery here: https://www.windracer.net/photos). When adding new photos to the site, I put the files into the appropriate sub-folder on the NAS and then run a synchronize in Piwigo so they're added into the database.

If you were move a photo/file from one physical album to another, and then run another sync, Piwigo would delete the entry for the photo in the database (since it's no longer in Folder A) and create a new one (in Folder B) which would lose any metadata you added (tags, descriptions, etc.). That's why I wrote the Physical Photo Move extension erAck referred to.

Hope that helps.