You can think of file and folder permissions as the base-level permissions—the permissions that are applied no matter what. For NTFS volumes, you use file and folder permissions and ownership to further constrain actions within the share as well as share permissions. For FAT volumes, share permissions provide the only access controls. The reason for this is that FAT volumes have no file and folder permission capabilities.
File and folder permissions are much more complex than share permissions, and to really understand how they can be used and applied, you must understand ownership and inheritance as well as the permissions that are available.