You're confused about who does what. The browser interprets the <INPUT TYPE="FILE" NAME="file"> and presents the file browser dialog box to the user. When the form is submitted by the browser, the CGI program gets the file data provided by the browser.

I am not aware of any browser that supports directory uploads. Some will allow more than one <INPUT TYPE="FILE" NAME="file"> tag per page, which might offer the ability to let someone pick several files. But I've never tried that and I've read it's browser dependent.

If you want to automate the uploading of a full directory of files to an existing browser page/CGI that supports one file per transaction, you could automate that with Perl and LWP.