Welcome to Android Central! What kind of albums have you previously created? "Album" can mean different things, depending on the gallery app. On most stock Gallery apps, creating a new album means creating a new directory on the phone's storage, which gets displayed in the Gallery app as a separate album. On some Gallery apps (like Samsung's, I believe), you may be able to create an album within that Gallery app, but that album organization is only recognized by that Gallery app, and no others. So if you created an album there, and then used Google Photos, the latter wouldn't see those albums.
The Google Photos app treats albums differently. The main Google Photos screen shows all of your photos -- both the ones on stored on your phone and the ones saved to your cloud. You can create an Album and set it to display any number of your photos, these photos aren't moved physically to an album -- it's just an easy way of organizing your photos. If you tap Menu>Device Folders, that's where you can sort by the different directories on your phone's storage (which is like the first method of album creation I mentioned above).