I’m not sure why there does not exist an option to rename folders in Google Reader.

If urgently need to rename numerous folders, I currently know of only one way – install an RSS reader that syncs with Google Reader on your Mac, and then use the rename folder functionality within that app.
Try either Gruml or NetNewsWire. Both apps let you change the name of the folder(s) with a mere right-click or control-click on the folder name.
Gruml is the smaller of the two, weighing in at 7.8 MB.

The file size of NetNewsWire, on the other hand, is quite a bit larger, at 17 MB.

{ 3 comments… read them below or add one }
I’ve tried Google Reader, and I didn’t know what to do with it. For my RSS feeds, I use RSS Pro on the iPhone. I read those when I have a couple of minutes to kill. Love that app. From your screenies above, it seems that you’re a Canon fan? I am a Canon 50D user. How bout you?
@BigMacky – I like Google Reader because it fetches new content in the background without me having to log in and launch the site. I even get to read content that was posted way before I even signed up for its RSS.
Client-based RSS readers like NetNewsWire requires that one launches the app before it fetches anything.
Forgot to mention … I’m an all-Nikon guy when it comes to DSLR cameras and lenses
But I swear by Canon printers.
I have feeds for almost every camera brand coz I just like to be in the know as far as digital photography hardware is concerned.