The easiest way to create a new library is by dragging the folder containing your images from the Finder and dropping it on the Observatory application icon. You can save this library, or use this mechanism to quickly inspect the contents of a folder, and then discard the library afterwards. For example, you could create a temporary library to inspect the images of your most recent observation session this way.

To create a new empty library, click the New button in the welcome window, or choose File ▸ New Library.

Import images into a new library by clicking the Import Images… button in the center of the window. You can also choose File ▸ Import ▸ Images… (⇧⌘I) in the main menu, or in the action menu of the Source Folder Panel choose Import Images….

Import: Add source folders or images?
Import: Add source folders or images?

You may be asked to either import the whole folder of images, or add source folders first. Because of macOS imposed sandbox restrictions, Observatory needs to be given access to the folders containing the images. If you import a complete folder, then this is done automatically, but if you wish to import individual images from a folder, you need to provide Observatory access to the folder first. It is only relevant if you have not done so yet for the library. The folders you have given Observatory access to are referred to as Source Folders. You can see these folders by expanding the Source Folders Panel in the Sidebar.

If you choose to explicitly add Source Folders by clicking the Add Source Folders button in this Dialog, or by clicking the Add Source Folder… button in an empty library, or choosing File ▸ Import ▸ Add Source Folder… in the main menu or its equivalent in the action menu of the Source Folder Panel, you are presented with a Dialog where you can choose one or more folders. Towards the bottom of this Dialog click Add all subfolders as source folders if you wish to recursively add the subfolders as well. Click the Add Source Folder button finally to add them.

If you click the Import All Images button instead of Add Source Folders, you are presented with a Dialog where you can also initially only select folders, but in this case this serves as a means to add Source Folders as well as import the images contained within. You cannot select individual images, unless some of the folders have been added as Source Folders already. You are presented with the following options:

After selecting the folders, click the Import button to add them as Source Folders, and import all their images.

If you did add Source Folders previously, importing images will lead to this same Dialog, but you will now have the added capability to import individual images.