Freeing Storage to upgrade MacOS
How to off-load apps and Documents from my Mac to iCloud to regain storage space and be able to upgrade to MacOS Monterey?
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You can't do it that way. iCloud Drive is a syncing service for your device - delete from your Mac and it deletes from your iCloud on the web and vice versa.
You will need to delete data from your Mac, or park files on an external drive of some sort while you upgrade. It's an opportunity also to do some weeding and to consider if you need all that content or what can be jettisoned.