From Katherine Blocksdorf,
Your Guide to Horses.
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Folding your blankets, coolers, rugs, and sheets properly makes them easier and safer to put on your horse or pony. Your horse will be less likely to spook if you set a folded bundle on his back and slowly unfold it than he would if you came at him with an unfurled blanket and attempted to drag it over him.

Fold your blanket while taking the it off of the horse or after cleaning to prepare it for the next use. A folded blanket is also easier to carry. If you are folding blankets for storage tuck moth balls, camphor or cedar blocks into the folds to repel pests like moths and mice.

Start with the blanket, unbuckled on your horse, or lying on the ground or floor. On the ground lay the blanket so the outside is facing up. Spread the straps out straight so they can be folded into the blanket as you go.