Question: OK, I've looked everywhere for the answer for this and don't seem to be able to find it. 

We are trying to get our Google Drive organised so that the right people get access to the right things without a lot of explicit sharing. We have a top-level folder called "Company" with sub-folders for "Admin", "Finance", "HR", "Engineering" and so on. The sub-folders have more restrictive permissions than the top-level one.

We've now got more or less everything in the right place, and mostly this works. The problem is where individual files or folders have their own permissions - they then don't seem to inherit the permissions from their folders. How do we reset the permissions for *everything* in each part of the hierarchy so they are the same as the parent folder?

On Windows Server or Mac OS X there is a clear distinction between "inherited" and "explicit" permissions for an item, and it is easy to remove the "explicit" permissions for all the items in a hierarchy. Where is this for GD?

Answer: 
If I need to reset folder permissions, I rename the folder (*Finance → Finance\_1*), make new folder with the old name (*Finance*), and "move" all sub-folders to the new folder. 

With this move, you reset all permissions for subfolders.
<http://gappstips.com/docs-tips/view/98/protect-your-google-drive-folders-by-setting-permissions>

according to that link it seems like you need to make sure the files are set to the default permissions then they should inherit from the folder.

edit: ctrl+a selects all files in the folder then you can change who they are shared with all at once.