Working on your website locally means having the files that make your website tick right there on your computer. It's common those files live in a version control repository. You work on them, and push them up to the repo when you are ready. Other people work too, and you pull their changes back down.
What might not be in that repo, are images files from the CMS. WordPress is a classic example of this. When you upload an image in WordPress, it does a whole song and dance. It gets uploaded to the `uploads` folder, multiple versions are created, even the database is updated and attachment meta data happens. What doesn't happen is that a version control commit happens with all those files.