It is easily shown that the forgetful functor $F: \mathbf{Man} \to \mathbf{Set}$ preserves limits ($F$ is representable), but does it preserve colimits? It certainly preserves all examples of colimits that know of which exist in $\mathbf{Man}$, namely
- coproducts (disjoint unions)
- the glueing of open manifolds along open subsets
- quotients obtained by acting properly and freely by Lie groups on manifolds.
The second two cases are special cases of Theorem 5.9.5 in Bourbaki, Variétés differentielles et analytiques:
The set theoretic quotient of a manifold $X$ by an equivalence relation $R \subseteq X \times X$ admits a (necessarily unique) smooth structure such that $X \twoheadrightarrow X/R$ is submersion iff $R \subseteq X \times X$ is a submanifold of $X$ and either projection $R \twoheadrightarrow X$ is a submersion.
By the fact that $F$ preserves coproducts it is enough to show that it preserves coequalisers, but I'm completely stuck on this special case.
In other words, you are asking if there are "exotic" coequalisers in the category of manifolds. In fact, there are.
Let $S^1 = \{ z \in \mathbb{C} : \left| z \right| = 1 \}$ be the circle, let $R = \mathbb{Z} \times S^1$, and let $d_0, d_1 : R \to S^1$ be defined as follows: $$d_0 (n, z) = \exp (i n) z$$ $$d_1 (n, z) = z$$ It is not hard to see that the image of $R \to S^1 \times S^1$ is dense, so if $M$ is a manifold and $f : S^1 \to M$ is a smooth (or even continuous) map such that $f \circ d_0 = f \circ d_1$, then $f : S^1 \to M$ must be a constant map. Hence, the coequaliser of $d_0, d_1 : R \to S^1$ in the category of manifolds is the point. On the other hand, the coequaliser of $d_0, d_1 : R \to S^1$ in the category of sets is an uncountable set. So this coequaliser is not preserved.
In the above, I have assumed that your manifolds are Hausdorff. The same (counter)example works even if your manifolds are only locally Hausdorff – but a slightly more sophisticated argument is needed there.