You can partition C drive while files are on it, but it is still a system-disk operation. A backup is important because power loss, disk errors, or choosing the wrong partition can cause trouble.

Step 1. Select C drive on the system disk and confirm it by drive letter and capacity.
Step 2. Choose Resize/Move and shrink C drive to create unallocated space.

Step 3. Preview the resize operation and click Proceed. Restart if required.

Step 4. Select the unallocated space after shrinking and choose Create.

Step 5. Set size, drive letter, label, and NTFS, then click Proceed.

Partitioning C drive with files is possible, but do it with a backup and do not shrink C drive too much.