Help me understand how Contacts work

Contacts can sync from other sources besides iCloud. For example if you have google mail added to your iPhone's mail app, it can also have contacts. In settings under your iPhone, then mail, then accounts, check which mail accounts you have added. Check which ones you have contacts turned on in that area for each account. Then you should check all your devices to ensure you have contacts turned on for all the same accounts in each device. Also if you are using iCloud contacts, then you need to make sure you have contacts turned on for iCloud for each device in settings or they won't sync.

Contacts can be stored in different locations.

iCloud, On Your Mac or on a 3rd party email account.

Contacts on iCloud and 3rd party email accounts will sync across to all devices that have said account added to them.

Contacts created in the "On your Mac" group, will only exist "On your Mac".

If you don't ever want a contact to exist only on your Mac, then don't create the contact under that group. Choose one of the other groups instead before creating a contact.

If you have the "All Contacts" group selected when creating a new contact, it will create it in whatever location you have set as the Default Account in Contacts Menu ➜ Settings ➜ General.

Ziatron wrote:

OK, I've got a number of contacts on my Mac showing up under "All on my Mac" is there an easy way to move these over to iCloud without opening each one up and copying and pasting them and creating a new contact?

Unfortunately no.