[This is LEGACY information]
iCloud is the collective name for a bunch of 'syncing' features that apps can take advantage of. This includes, but is not limited to:
Document syncing (iCloud Drive)
App Preferences (icon favourites etc)
Handoff (start editing on one device and resume on another)
The latest versions of iThoughts (iOS) and iThoughtsX (OSX) support the above iCloud features.
iCloud Drive is a place where you can store your maps so that they become 'ubiquitous' (i.e. available on all your devices.)
iThoughts (iOS) integrates with iCloud Drive by way of an iCloud folder in the map picker. All maps saved into the iCloud folder will be 'sent up to iCloud' automatically. On the Mac you must save your maps into the iCloud Drive/iThoughts folder (in Finder) and OS X will 'send them up to iCloud'. Once in iCloud, the maps are (re)distributed out to all your devices (iPhone, iPad, Mac etc)
See below how 'My Map' is in the iCloud folder in iThoughts (iOS) and also in the iCloud Drive/iThoughts folder on a Mac.
Should I be using this instead of Dropbox?
iCloud syncing happens in the background and thus tends to be more 'seamless'. If you just want a hassle free way to ensure your maps are backed up and available everywhere then iCloud is for you.
iCloud Drive 'strongly encourages' you to store your documents in an app centric way (e.g. all mindmaps in one folder, all spreadsheets in another etc.) Many people prefer a more 'project focused' approach to document management (e.g. all mindmaps and spreadsheets relating to a project in the same folder.) If you fall into the latter camp then I'd stick with Dropbox. You CAN work this way with iCloud Drive - but it's not pretty!
If your want more control over (and visibility of) the sync process then Dropbox is probably better - it's not such a 'black box' as iCloud (although with iCloud.com, it's getting better.)
You can run them in tandem...
If there is no iCloud folder in iThoughts (iOS) then you will need to Sign In to iCloud using the iPad/iPhone System Settings app - and enable iCloud Drive.
Changes are not always percolated through the system as quickly as you'd expect. Sometimes it can be minutes before a new or updated map is pushed out to all your devices. This is something you'll need to speak to Apple about...
If you delete a map in iCloud then it is also deleted from all other devices. To recover a deleted map you need to visit iCloud.com - see here
Conflicts are an unfortunate fact of life - see here.
Why can't I open 'in place' from the iCloud Drive app?
iThoughts has registered with iOS the fact that it can view ANY file type. It does this so that iThoughts appears as a target app in the Open In App share dialog presented by other apps. This is a great way to get 'attachments' into iThoughts where they can be pasted into topics. This process involves sending a COPY of the document to iThoughts.
With iCloud Drive, Apple introduced a new way to 'Open In App' whereby the original document would be sent to iThoughts (not a copy) thus enabling iThoughts to make changes to it. Cool! Except that opting in to this capability means that all file types for which an app is a registered viewer will be sent this way - not what we want. Another side effect is that all files (in the iCloud Drive app) will be opened by iThoughts by default - not what you want.
This is all a bit of a mess, so for now I've disabled the feature. If you want to open a file stored in iCloud you must go via iThoughts (either use the 'iCloud' folder in the map picker or use the Share->Cloud->Download option.)
How it works
iThoughts saves maps (intended for iCloud) into a 'special' folder on the iOS device.
Periodically iOS looks in that folder and when it sees something has changed it uploads it to the iCloud servers.
Periodically iOS asks the iCloud servers if there have been any changes. If there has it downloads them (into the 'special' folder.) This happens even when iThoughts is not running.
iThoughts gets notified when iOS has downloaded a change - enabling it to reload those changes.
The key takeaways from this are:
The maps are stored locally (on device) and uploaded automatically by iOS (which is how it handles no internet situations.) You are NOT editing the cloud copy directly - that's an illusion.
There is no way to insist that changes are uploaded/downloaded - iOS will do it when it's 'good and ready'.
NB: This is pretty much how the Dropbox syncing works - with 2 key differences:
We can insist that Dropbox upload/download documents immediately.
We cannot download Dropbox changes when the app is not running.