When you opened system preferences > iCloud click on sign out , these are the upcoming steps to sign out completely and then again set up the iCloud account and also configure the iCloud Keychain .
( a ) Open system preferences > click on iCloud and click on sign out , you can see a window stating do you want to keep a copy of your iCloud data on this Mac before signing out ? The boxes iCloud Drive , contacts , calendars , reminders are checked by default - so click on keep a copy .
( b ) Then uncheck the boxes of iCloud Drive , contacts , calendars , reminders and click on continue .
a pop window will appear . Do you want to keep a copy of safari passwords on this Mac ?
( 1 ) Delete from Mac ( 2 ) cancel ( 3 ) keep on Mac .So click on delete from Mac .
( c ) It will prompt enter the Apple ID password for mail address to turn off find my Mac , so enter your Apple ID password and click on continue , a small circle will rotate , be patient .
( d ) After some time a window will appear showing iCloud lets you access your music , photos , contacts , calendars and more on your devices , automatically , your Apple ID would be written in the field , click on next .
( e) It will prompt to enter your apple id password , so enter the password and click on next a small circle will rotate .
( f ) After some time a window will appear ( 1 ) use iCloud for your documents and data ( 2 ) use find my Mac , the two boxes are checked , two options will be shown back and next , so click on next .
A small window will appear allow find my Mac and use the location of this Mac ? Two options will be shown not now and allow , so click on allow .
Again a pop up window will appear , enter your Apple ID and password and click on ok , a spinning beach ball will appear , be patient .
( g ) In system preferences > iCloud the keychain box will get unchecked , so tap the keychain box a pop up window will appear to set up iCloud Keychain on this Mac , request approval from one of your other devices using iCloud Keychain .
( h ) Three options will be shown ( 1 ) use code ( 2 ) cancel ( 3 ) request approval .
So click on use code , wait for a while then in the empty field enter your iCloud security code and click on next , it will show keychain is setting up after a while the box of keychain will get checked and you can also see options in front of it , you can also check the box of Siri .
( I ) Open system preferences > iCloud Drive ( the box is checked ) and click on options > check the box of desktop and documents folder - it will show setting up and click on done .
( j ) Again open finder > click on iCloud Drive > you will see documents ( they will appear after hours as it depends upon the data that was saved in iCloud Drive , network speed is also the factor to download all of them , click on download icon infront of them ( if the documents are created with Microsoft office , a pie chart will rotate and fill up .
You also wrote that put up a wrong Apple ID password intentionally an error will show up .
You have to set up the iCloud drive ( check the box of iCloud drive ) , in front of it options button is shown , click on it and check the box of desktops and documents and click on done , quit system preferences .
Also , how did you reset the Apple ID password in the window please post a screen shot of it ( hide your mail address / any trusted device number before posting ) .
