IPadOS 15 will make several key improvements to the Files app. Apple’s own iCloud Drive is listed by default, and you can also add OneDrive or Google Drive. Files doesn’t treat cloud storage differently from local storage. Personally, I just skip this and lean on cloud storage, which is another common point of confusion. That’s a departure from most laptops, where you’d often save to a general-purpose folder labeled “Photos” or “Documents.” You can create folders in the Files app and then use them to save files from multiple apps, but they’re not there by default.
In other words, you’ll save files to a folder with the same name as the app you’re using to save the file. The On My iPad folder will include folders for apps you’ve used to save files to your local storage. All iPads will include the On My iPad (which is local storage), iCloud Drive, and Recently Deleted locations.
It instead lumps your storage into several big buckets named Locations. The Files app doesn’t show drive directories like the Explorer and Finder apps on Windows or MacOS laptops.