When Apple released macOS 10.12 Sierra, it changed the way it handles your data. Instead of keeping the "Documents" and "Desktop" folders on the Mac locally, it added those locations into iCloud. Since Apple only gives you 5GB of cloud storage for free, you would need to buy more storage to storage more files unless you turn that feature off.
To get your "Documents" and "Desktop" folders back on your local drive as it was before macOS Sierra, go to Settings > iCloud and click on Options next to iCloud Drive. This will bring up a list of things that are stored in iCloud, and the very top item should be Desktop and Documents Folders. Simply uncheck the checkbox next to that item to turn off the iCloud syncing of those folders.