What Is the On My Mac Folder In the Finder Sidebar?

In finder there is in the left pane a folder called “On My Mac”. You can hide it or show it in settings for finder under “left pane”. I cannot use i for creating folders or storing files in it and “info” is blank. What is the purpose of the folder and what is it used for?
I tried to use the folder “On My Mac” as my main folder for storing files locally on my mac and not in iCloud.
—–
Stefan Olsson