Set up iCloud Photos. Today I noticed recently taken photos and videos on my iPhone were not in my Mac's Photos app. Went to transfer and Photos wants to transfer 70,000 photos (about the number in my iCloud Photos) to my Mac. What have I done wrong?

Before Photos will import the new photos from your iPhone to your Mac from iCloud Photos, the local library on your Mac needs to be fully in sync with iCloud Photos.

iCloud Photos is keeping the Photos Libraries on all synced devices identical. It will upload all photos and videos from all devices into iCloud and merge them into your existing iCloud Photos Library and from there the full iCloud Photos Library will sync back to all your devices. Once your Mac is in sync with iCloud Photos you will be seeing the new photos from your iPhone on your Mac. Or is your iPhone not syncing g with iCloud Photos?

Even if Photos is downloading all photos from iCloud again to your Mac, it will not create duplicates of exactly identical files. iCloud Photos is checking for duplicates and solving conflicts between differently edited versions of the same photo.