iCloud consuming too much space on hard drive

My Windows 11 PC is telling me my storage is almost full. When I look in my Storage settings, a large amount of space out of my 474 GB is consumed by iCloud Drive (under 'other', 143 GB are consumed by Icloud) - I am really unsure what this is about as the whole point of cloud storage is that it doesn't consume hard disk space. What is happening here? My PC is struggling because 'storage is full'. I explicitely didn't buy a PC with a lot of hard drive space because I have iCloud.