iCloud Drive & Downloaded Folders/Files

This old-timer is a bit confused... just want to be sure.

I recently upgraded my iCloud Storage to 2TB in order to utilize back-ups & syncing of materials on my MacMini, iPad & iPhone....working great.

I recently downloaded a folder from iCloud Drive to my Mac's Desktop & it appears with a down-arrow icon.

Is this folder now both in iCloud & on my desktop?

If so, would changes in a file within either folder appear in the iCloud (& thus on my other devices)?

Is there an on-line reference that would help me fully understand the workings of iCloud?

Thanks for any help!