How to manage storage on iPhone with 256GB capacity?

Delete content off of the iPhone to release space. Or move it out to a computer or external drive.

The iPhone's local storage capacity and the iCloud Storage are 2 separate things.

iCloud storage cannot be used to complement local storage capacity.

If you are using the iCloud Photo Library option, you can turn on "Optimize Storage" in Settings ➜ Photos, to reduce the amount of storage space taken up by photos and videos in the Photos app. It will reduce the quality and file size of locally stored items, but you can download a full quality version of each when necessary.

click here ➜ Manage your photo storage - Apple Support

iCloud storage is used to store backups, and to sync photos, videos and files from a device. Syncing means that there is always a local copy on the device. It is not an off device storage solution except for backups.

Delete some unneeded data. You cannot increase the internal storage on the iPhone. That is fixed storage and it what you get when you purchase the iPhone. It cannot be increased. iCloud is a syncing service and cannot be used to increase the storage capacity of your device.

This may help --> Manage and Clear Storage on your iPhone a… - Apple Community

rekisraimonds wrote:

But what's the point of those 2T iCloud if you can't use them ? Only as much as on the phone ? Es saprastu, ja daudzas fotogrāfijas glabātu tur, kad telefonā izdzēstu. Bet dzēšot no telefona, tiek izdzēsts iCloud.

The point is to store backups. Everything else keeps a local copy on the device.