You have the option with iTunes to add music and other audio files to its library in one of two ways: you can use the default method of copying all files into the iTunes Media folder, or you can opt to add by reference, where the file remains where it is on a drive and the library points to it. (This preference is in iTunes > Preferences > Advanced.)
Some people prefer to manage their music and other audio files in their own folder hierarchy or have enormous libraries they have to keep stored on an external drive. Most people let iTunes copy files and store them in the iTunes Media folder, which is typically found in Home > Music.
Where this get tricky, though, is when you want to delete an audio file from iTunes. If you navigate to the iTunes Music folder or, for externally stored files, to their location and then drop it in the Trash, the iTunes library is out of date. That can lead to errors when trying to search for and play back audio in iTunes.
Instead, you should select an item or items in iTunes and choose Song > Delete from Library. This is when you will see a dialog that might leave you scratching your head:
Do you want to move the selected song to the Trash, or keep it in the iTunes Media folder?
Then in smaller type:
Only files in the iTunes Media folder will be moved the Trash.
The buttons read Cancel, Keep File, and Move to Trash.

iTunes offers a dialog with too many conditionals to help fully understand what the result will be.
Apple is hedging its bets:
If one or more files are in the iTunes Media folder, then clicking Move to Trash will both remove the listing from the iTunes library and move the items to the system Trash.
If one or more files is referenced by iTunes, clicking Move to Trash only removes the listing from iTunes. The file remains in place.
The difference between Cancel and Keep File is that Cancel stops everything, while Keep File doesn’t touch a file if it’s in the iTunes Media folder, but does remove the listing from iTunes.
If you have iCloud Music Library enabled and the file has been uploaded to iCloud, iTunes displays a different message which warns about deleting the audio file or files from every linked device.
This Mac 911 article is in response to a question submitted by Macworld reader David.
Ask Mac 911
We’ve compiled a list of the questions we get asked most frequently along with answers and links to columns: read our super FAQ to see if your question is covered. If not, we’re always looking for new problems to solve! Email yours to mac911@macworld.com including screen captures as appropriate, and whether you want your full name used. Every question won’t be answered, we don’t reply to email, and we cannot provide direct troubleshooting advice.