Cataloguing

I just discovered that I have a catalogue containing 700GB of information in it. Wowsers. I've never really understood the whole catalogue vs session thing, and I'm not sure if I have things set up the way they should be, but I'd like to know if I can simply delete this catalogue without consequences. I keep all of my raw files in a separate folder, and I store my finished images in yet another folder. Is this catalogue essentially copying everything I import? Is it necessary for Capture One to function in this manner? I don't want to be buying terabyte externals every six months. Please advise?