I notice that the Android Dropbox app, when uploading a file to the Dropbox server, first copies the source file to a cached file in a hidden folder on your phone’s system storage. Then it uploads the cached file to the Dropbox server.
Why? I don’t know for certain. Maybe the app developers wanted to ensure that the source file isn’t altered or deleted during the upload process. First caching the file is a conservative tactic.
The cached file consumes precious system storage space on your phone. On my phone with 8 GB system storage, this is significant.
Regain lost storage space
To regain that space, delete the Dropbox cache. You can do this from within either the Dropbox app or Android’s settings (Applications, Application Manager, scroll down to Dropbox and press the Clear Cache button).
Dropbox explains that Dropbox’s cache folder is hidden.
It would be nice if the Android Dropbox app allowed the user to choose whether the Dropbox app first cached the file before uploading it. Oh well, no app is perfect.