I gave up on having iCloud automatically store docs, etc. Even though it says it won't take things off your Mac if you have room to keep them there, it lies. I was sick and tired of having to actually download items before I could back them up to external storage because they had been removed from my main drive. Finally I downloaded most to an external drive, then turned off the iCloud sync for docs (which made all the synced files disappear from both iCloud and the Mac) and then copied the data back from the external to my Mac. Did this on two other Macs which was very time consuming but worth the effort.
Now I only use iCloud sync for Mail, Safari, Notes and manually upload selected files and photos for storage.