Definition of working directory

I was reading Git Community Book and came across following definition for working directory

The Working Directory

The Git 'working directory' is the directory that holds the current checkout of the files you are working on. Files in this directory are often removed or replaced by Git as you switch branches - this is normal. All your history is stored in the Git Directory; the working directory is simply a temporary checkout place where you can modify the files until your next commit.

What does it mean by this " Files in this directory are often removed or replaced by Git as you switch branches"?

And does working directory is just a directory we get with $pwd ?

Thanks, Anjib