iCloud Drive not removing files from local drive when it is full

Select folders from drop box ( they come under category of Macintosh HD ) see the article Check if your Mac needs more RAM in Activity Monitor - Apple Support

when you moved folders ( used select and copy and then pasted Mac keyboard shortcuts - Apple Support from dropbox to Macintosh HD , they occupied even more larger space in Macintosh HD read Get system information for your Mac - Apple Support

You can again drag and drop those folders or select and copy - paste in drop box , again select them right click and move to bin , restart the Mac and empty the trash , the hard drive space will be reduced .

I have 2TB on the could. I have a 500Gb hard drive. I want iCloud drive to manage the 2Tb for me and delete when necessary. It is not doing this.

It will not automatically manage and delete files or folders ( may be you have enabled optimise storage ) , you have to manually delete it .

Regarding why they don't sync with iCloud Drive , even iCloud Drive and desktops and documents box is turned as on .

You have to check what is the size of the folder , right click on each one and use get info Get file, folder and disk information on Mac – Apple Support

See Access iCloud Drive files from your iPhone and other devices - Apple Support

Also check what are the read and write permissions set up on Macintosh HD it should be like this .

See If you don’t have permission to use files on a Mac disk - Apple Support

If you need permission to open an item on Mac - Apple Support

Note: in case if you had changed read and write permissions for Macintosh HD , most probably Mac OS is corrupted , you might have to erase the hard drive and reinstall Mac OS .

Greetings mdb7,

If you are creating a copy of a local folder and moving that into iCloud Drive, instead of just moving the content itself to iCloud Drive, that would explain why you have a duplicate copy of that data stored locally on your Mac. You can learn more about using iCloud Drive by reviewing the guidance in these resources:

Access and manage your files in iCloud Drive - Apple Support

Add your Desktop and Documents files to iCloud Drive - Apple Support

Store your files in iCloud and save space on your device

The files that you keep in iCloud Drive use your iCloud storage. And as long as you have enough space in iCloud, you can store as many files as you like.

If you need more space, you can delete files to free up space in iCloud. When you use iCloud Drive and delete a file on one device, it deletes on every device that you're signed in to with the same Apple ID. You can find deleted files in the Recently Deleted folder in the Files app or on iCloud.com for 30 days. After that, they're removed. 

Learn more about how to manage your iCloud storage. 

Take care.

Hi mdb7,

While it's possible to use iCloud to Optimize storage space on your Mac, it does not appear to do the same for an external drive.

1. Choose Apple menu  > About This Mac, click Storage, then click Manage.

macOS calculates how much space is being used by different categories.

Note: Wait until all categories are finished being calculated to ensure you’re seeing the accurate amount of space. Values are refined as each category is calculated.

View the recommendations and decide how to optimize storage on your Mac.

If you'd like, you can always send your suggestion to Apple using this link: Product Feedback - Apple

Take care.

See this thread Cloud and Hard Drive - Apple Community

Find and delete files on your Mac - Apple Support

Free up storage space on your Mac - Apple Support

Connect and use other storage devices with Mac - Apple Support

I have also set iCloud Drive to sync Desktop and Documents folders (not that this should matter, the iCloud drive folder I have created is at the root i.e. iCloudDrive -> MyFolder) - not required to create folders at the root .