Say, the hard disk is 100 GB. 40 GB is occupied by files, 60 GB is free (=not occupied by files).

Now you delete a file of 1 GB. The information in that file (the bits and bytes) stay where they are, totally unchanged. But the filename is removed from the 'directory' (that the table of contents) of the disk, so it can't be found anymore. And that 1 GB of space is added to the free space (because it's not occupied by a file anymore).

So know we still have 100 GB, with 39 GB occupied by files and 61 GB free. You can see the total amount of free and occupied space in neat pie chart in the drive's properties.