I moved my Pictures Folder to an external drive to free up space on my Mac. I now realize that from that location it will not automatically upload to iCloud. How to I put it back where it was originally and where?

I assume that you mean the "Pictures" Folder in your home directory.

If you want to take your Pictures folder back to your Mac from an external drive:

1. Connect the external drive with your Mac.
2. Open Finder and tap on the icon with the name of your external drive.
3. Right-click the Finder icon in the Dock and tap "New Finder Window".
4. In the new window, you select your home folder (which is named after your username (not your Apple ID name!))
5. Put the Windows side-by-side and drag the Pictures folder right back into your home folder.

Done!

I am not sure if the Pictures folder in your home directory is actually syncing, may you try using the Photos app and activate (Your Name) -> iCloud -> toggle "Photos" to on in System Settings on your Mac and in the Photos app if you haven't already.

I also strongly recommend you to upgrade to macOS Ventura (13.1) from macOS Monterey going to System Preferences -> Software Update ore using the App Store.

Kind regards,

Dago

It is possible to have Photos on an external drive sync with iCloud Photos. See information in Move your Photos library to save space on your Mac - Apple Support including the following excerpt:

5 - If you use iCloud Photos, designate this library as the System Photo Library.

The Pictures folder does not upload to iCloud. Did you move the Photo Library? To sync iCloud Photos open Photos and go to Photos > Settings > iCloud to enable iCloud Photos.