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