how to free up space on my icloud

Click on this link to read how to 'Manage your iCloud storage' --> https://support.apple.com/HT204247 - including seeing how much storage you have and how to delete items stored in iCloud such as backups, photos, files, mail, messages and voice memos.

If you have backups for devices you no longer own and do not think you will ever need those again (i.e., you have already made a backup of your newer devices), you can delete those.

Yes. In particular, if they are backups of old devices that you no longer have and no longer need the backup. If they are backups of devices that you currently use, if you delete the backup you won't have ability to use it to restore if you need it. Also see: Manage your iCloud storage - Apple Support

What are you seeing a "folder"?