Does iCloud Drive use up hard disk space?

Hi,

Quick question about iCloud drive. My Mac is running low on storage again so I uploaded a few files onto my iCloud drive, then deleted them from the folders they were originally saved in and thought this would free it up a bit. However it's still showing the same amount of storage space is been taken up.

So does iCloud Drive still save files on the hard disk as well as online? It'd make sense to do that I suppose so you can access them without an internet connection, but does it have an option to save files just online instead of on the hard disk as well?

Thanks for any help.