The difference between a cloud-based app and a traditional app is where the data and infrastructure for the app resides. When you download a traditional app, you're downloading an entire software package onto your device. Everything you need to run the app fully is in that download package, and you can run it on your device with or without internet connectivity. If updates are made to the app, your version of the app is not updated unless you download and install the updates.
With a cloud app, the functionality and data is stored in part or fully online. Depending on the app’s nature, you may be able to do some things without an internet connection, but you need to be online to do most. The only parts of the cloud-based app that are housed on your device are the user interface and any functionality required to link that interface to the remote elements.