If a file resides on iCloud Drive, can I delete it from my Mac to save space?

No but you may be able to save space by turning on the Optimize Storage option. See the following from Add your Desktop and Documents files to iCloud Drive - Apple Support

(and note that it is applicable even without the Desktop and Document option turned on)

If you need more space on your device, iCloud Drive can help. On your Mac, choose Apple menu  > System Preferences. Click Apple ID, then click iCloud. On macOS Mojave or earlier, choose Apple menu  > System Preferences, then click iCloud. Turn on Optimize Mac Storage. Then your Mac keeps all of your recent files on your computer, but keeps your older ones only in iCloud, ready for you to download when you need them again.

See the article https://support.apple.com/en-in/guide/mac-help/mchl1a02d711/mac

Move items to your Mac and remove them from iCloud Drive

• On your Mac, drag items from iCloud drive to another folder in the Finder sidebar or on the desktop, such as Downloads, Movies, Music and Pictures. 
• The items are copied to your Mac and removed from iCloud Drive on all your devices set up for iCloud. If you change your mind, you can drag items back to iCloud Drive.

The second method .

 open system preferences > iCloud and uncheck the box of iCloud Drive a pop up window appears , showing to keep a copy of documents , and remove from the Mac .

( a ) if you had clicked on keep a copy , they will be archived in home folder that can be viewed by clicking on finder in the dock , take cursor on top menu bar > Go > Home > your user name > iCloud Drive ( Archive ) .

Once the files are archived you can delete them from finder > iCloud section > iCloud drive .

In the last again double click on iCloud Drive box to turn it as checked .

Hold shift key , option key and command key , in the finder > iCloud drive on the trackpad move three fingers in upward direction , select the files and leave the first one .

Just an example screen shot .

For the desired files to be selected , hold option and command key and Tapp the desired files .

RethinkYourSoftware:

It's not that iCloud couldn't keep your file if the cached version on your Mac is removed (in fact, it does, it's just that there is no user interface for directly manipulating the cached version); it's that the delete operation you execute on your Mac, moves the file (in this case, residing in iCloud) to your "Trash", just as it does with local files.

The only difference is that the "Trash" resides on iCloud.

If you "empty the Trash", or "Delete Immediately" the files, they will be removed from iCloud, just as with any other storage.

However, the benefit is obtained as FoxFifth has written.

(If you watch the Finder listings of your iCloud Storage, you can often see when the Cached version of a file no longer resides on your computer, but is automatically downloaded when you read the file, such as into a program.)

The main benefit of doing things this way is that the user doesn't have to explicitly copy files to Local Storage, and copy back when the file is modified: such is automatic.

It also alleviates the user from having to think about deleting local copies of the files, when they are not being used, for the time being.

The disadvantage is that the user doesn't have direct control of the local cached copies.

Apple hasn't published any information as to why. They did something very similar with iCloud Photos -- an optimize choice that automatically decides which photos to optimize if the option is turned on.

I wouldn't describe it quite as "all or nothing", RethinkYourSoftware.

It's a design choice, and I gave the pros and cons of this design choice.

That being said, I certainly wouldn't mind having more direct control of the local cached copies.

However, please note that this is, generally, how Network or Remote storage has worked on multiple Operating Systems (OSs) for about half a century.

(Of course, precedent and "tradition" don't guarantee that something is the "best possible".

If you would like Apple's implementation to act differently, then give Apple the appropriate Feedback.)

Of course, Eric Root, don't those "different cloud based solution[s]" work more like a separate storage device (except, possibly, with certain applications that are more "integrated" into said "solution"/implementation)?

Different tradeoffs, different design choices.

Well, RethinkYourSoftware, I have yet to see any remote file system (Cloud Service, Network drive, etc.) that provides the level of straightforward user interaction—like simply another Drive—of iCloud Drive, with the addition of local control of Local Cached copies, like you seem to desire. (As I would desire, as well.)

You can always provide Apple with such feature requests.

We, on the other hand, are simply users, like yourself, and have no more power over what features are provided by Apple’s systems.

If you want to remove the file from your computer, you need a different cloud based solution such as Dropbox, OneDrive, or Flicker.