What if I have too many columns more than 10, 20 or 100, Do I need to create each column in my contact list or how it works?

No.

The system will create 3 custom fields (Email, First Name, and Last Name) for you by default and you can create further columns based on your requirement.

But when you will upload them data with CSV file import then the system will automatically create those fields for you.

So you do not have to create those custom fields one by one manually in the custom field area.