Learn Italian: Mio zio fa collezione di dischi.

In Italian, you drop the definite article (like il or la) before a possessive word when talking about a singular, unmodified family member. That is why it is just mio zio instead of il mio zio.

Why does the sentence use fa collezione instead of a single verb for "to collect"?

While the single verb collezionare exists, Italians very often use the phrase fare collezione (literally "to make a collection"). Both mean the same thing, but using fare is extremely common and natural in spoken Italian.

Why does the plural word dischi have an "h" in it?

The singular word is disco (record). It has a hard "k" sound at the end. To keep that hard sound in the plural before the letter "i", you must add an "h". Without the "h", the word disci would be pronounced with a soft "sh" sound.

Since this lesson is about the imperfetto, how would I say "My uncle used to collect records"?

You need to change the present tense verb fa (he does) into the imperfetto. Even though fare looks like an "-are" verb, its imperfetto is formed from its old Latin root "facere", making it act like a regular "-ere" verb. For "lui" (he), you use faceva. The sentence becomes: Mio zio faceva collezione di dischi.