Cloud-hosted file services like Dropbox, Box, Google Drive, and iCloud Drive try to create the best of several overlapping scenarios, but it can still be confusing to regular users exactly where their files are stored. With services that use one or more folders on your computer to sync files, the services make centrally stored copies of everything in those folders, and distribute them to other linked machines—your own and those of other people that you’ve shared items or folders with.
However, the "truth," or the definitive current state of your files, across that syncing ecosystem is affected by adding, moving, and deleting items in the folder on a computer. Those changes propagate through synchronization, updating the cloud-hosted copy and the versions synced to other machines.