Photostorage and icloud

My 16 gb iPhone is taking up 3.7 gb of space just to store photo's.

I have some pictures in my cameral roll, but mostly i use the photostream option. I have some streams shared from my macbook, and other people are also sharing some streams with me.

I always thought that when streaming photo's to the cloud they werent stored locally but that the cloud storage was used?

How can i free some space? Do i need to shut down these shared streams? -Do i need to sync everything with iphoto?

Thanks