At Admin Panel -> Forums -> Forum Settings -> "Levels to display for forum selector:", you can choose the number of levels for your forum selector. This controls the size of the dropdown navigation menu at the bottom of pages (that's where it is in the default wrapper template, could be anywhere you put it), as well as the selectors on the submit and edit pages. You will want to keep it short enough that it's a useful navigational aide and not just eating your bandwidth and slowing page loading for modem visitors.

If you have thousands of subforums, consider limiting the levels and then switching on the level-based forum selector so that people will still be able to submit to deeper levels.

If you have more than 2000 forums and haven't set the $overridesafety tweak, the levels will be automatically reduced to 1 to prevent the sheer size from creating errors.