In nginx, how to make the request http://domain/test to index file in the root dictionary instead of making a test folder

Question

I ask this questiion because I may misunderstand the location directive in Ngnix

location /test {
root /home/myfolder/html/
index index.html
}

I alwasy thought the /test is the URI that doesn't need to be a real folder in the root folder

in this case, the browser gives me a 404, after I add the test folder in the root folder, then it works.

How can I do it the right way without having many real folder that corresponding to the uri hiracy?