I'll refer you to this article for an in-depth discussion of the two main approaches, but there's a few ways you could structure a project such as this.
- One CMakeLists.txt file at the top level which lists all the source files out in all the different subdirectories. You typically only see this for very simple projects.
- One CMakeLists.txt file in each directory, each one brought in by its parent using
add_subdirectory(). This approach is very common.
- One CMakeLists.txt file at the top level, each subdirectory having its own file that lists its own source files and targets. The top level CMakeLists.txt file brings in the subdirectory files with
include(). Less common, but can have advantages over the other two.
Each has its pros and cons. Having just one top level CMakeLists.txt file would only be recommended if there were very few files and subdirectories. Once the project grows, keeping everything in the top level can become too much and make the resultant CMakeLists.txt file harder to follow. It also has the disadvantage that a change for a file addition or removal isn't restricted to a particular directory. That may not seem like a big deal, but if multiple people are working on a project and you want to easily see what part of a project someone else's changes affect (e.g. in a git history), it is harder. This is especially true if you both add/remove a file, thereby both change the top level CMakeLists.txt file and have the possibility of a conflict.
Once a project becomes non-trivial in size, most choose to add a CMakeLists.txt file in each subdirectory and use add_subdirectory() to bring them all together. @TheQuantumPhysicist's answer gives a good example of how this can be useful, so I won't repeat most of those details here. This structure offers you the ability to turn on/off whole sections of the build tree easily, but more importantly it gives each subdirectory its own variable scope. This can be important if you want to set variables, etc. in one part of the source tree but not have those changes visible in another part (think compiler flags which you only want to apply to one section of a complex directory structure).
The third option of one top level CMakeLists.txt file with each subdirectory providing a file brought in by include() is less common, but it has similarities to using one CMakeLists.txt file in each subdirectory. Both localise details about files in a directory to a CMakeLists.txt or other similarly named file in just that directory. Changes therefore become easier to merge and to understand in version control histories, etc. One thing that this third approach allows which the second doesn't is to use target_link_libraries() a bit more freely when using target_sources() to specify the source files in each subdirectory. The article linked at the top of this answer goes into detail about why target_sources() can be advantageous and it's at the heart of why this third method may well be desirable for many projects.
Lastly, I'd suggest you don't pick up the habit of putting your build tree inside your source tree. Rather, create your build tree(s) as siblings of the source tree. Aim to keep your source tree untouched by a build. All it takes is to have someone create a directory in the source tree with the same name as whatever you've used for the build tree for things to go awry (I've seen this more than once!). You may also want to set up multiple build trees for the one source tree, such as one for a Debug build and another as a Release build, so having these outside the source tree also helps keep your source tree less cluttered.