Data storage location? Difference between server and physical device
On OS X, Dropbox and iCloud keep local copies of all the files you have stored on them. The reasoning being that Macs usually don't want for space like iOS devices do. On iOS, Dropbox doesn't store the files locally until you try to do something with one, at which point it's downloaded. iCloud handling depends on the application. I know for some applications, the files are kept locally. Pages for example will download all available documents, seeing as how text files are typically not that large. I'm not certain about the rest.