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index.php should be in the root of your host folder - public_html/mydomain/index.php. When you upload to your host, the installation instructions tell you to upload the files and folders in the html (htdocs) folder, but not the folder.
From a security perspective, I would turn indexes off - if I understand what you are asking. Having indexes on will display a list of files in your folders if the host does not find a default file to display (index.php, index.html, index.htm, home.htm, default.htm - depends on your server configuration)