1

Only approx 200 M of internal drive storage left, but over 19GB of iCloud storage available and yet I am unable to run the latests iOS update as there is not sufficient space.

Could someone explain why that is? Is there anything specific I need to do so the iCloud storage can be used for the update? I'm sure I ran updates based on free iCloud storage space alone in the past and worked fine.

2

iCloud storage has no correlation to a Device's available space to allow installation of an update.

To show how much space is free on the device:

 Settings > General > Usage > Under 'Storage' > Manage Storage

From here you can see what is Used vs Available, and you can even see what apps are using the most.

You can always update via iTunes by directly connecting the iPad to a PC/Mac, this will by pass any space issues on the device usually.

2

There must be sufficient room on the device for the update to download & expand.
That's usually about 800MB or so.

Deleting the update directly downloaded to the device & instead running the process from iTunes can sometimes give you just enough to space to do it; otherwise you will need to delete additional apps or data - usually something like a sat nav app can be large enough & also easily reinstallable without losing data.

Delete the update from your iPad by going to
Settings > Usage > Manage Storage > iOS 8.3 > Delete Update

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